USD/VND Outlook:
The USD/VND is likely to move sideways as it trades near its recent average and within a stable range. Current geopolitical tensions are providing some support, but without a strong directional driver.
Key drivers:
• Rate gap: The US Federal Reserve's ongoing rate hikes are creating a stronger dollar against the more cautious approach of the State Bank of Vietnam.
• Risk/commodities: Rising oil prices amid Middle Eastern conflict are increasing global demand for USD, as oil is priced in dollars.
• One macro factor: Vietnam's targeted GDP growth of 10% for 2026 reflects ambitious economic goals, but the cautious monetary policy from the advisory council adds uncertainty.
Range:
Expect USD/VND to hold in its recent 1.9% range, between 25,890 and 26,375, without significant movement.
What could change it:
• Upside risk: A substantial positive US economic data release could boost the dollar further.
• Downside risk: Increased stability in the Middle East may weaken demand for the USD as a safe haven.
