The USD to VND exchange rate has demonstrated volatility in recent weeks, largely influenced by shifts in both U.S. and Vietnamese economic landscapes. As of mid-November, the USD is trading near 30-day highs around 26,357 VND, consistent with its three-month average, reflecting a stable range of 26,292 to 26,434 VND.
Recent insights suggest that the U.S. dollar gained some strength due to a reduction in Federal Reserve interest rate cut expectations, with the likelihood of cuts in December falling below 50%. However, analysts caution that this momentum may be limited as investors await a series of delayed U.S. economic releases, which could unveil weaker-than-expected data, potentially triggering a dovish shift in rate expectations.
Several key factors are currently influencing the U.S. dollar's performance. The transition in Federal Reserve leadership aims for a more comprehensive review of the agency's policies that extend beyond traditional monetary policy. The anticipation surrounding the U.S. Consumer Price Index (CPI) report for July also looms large, with a predicted core prices increase of 0.3%, which may impact future Federal Reserve decisions. Furthermore, ongoing U.S.-China trade tensions and global dedollarization trends complicate the outlook for the dollar.
Conversely, the Vietnamese đồng faces pressure from expected depreciation of around 3% against the dollar in 2025 due to the strong U.S. dollar and global economic conditions. The State Bank of Vietnam has intervened to stabilize the VND by selling $1.5 billion through forward contracts, responding to recent exchange rate pressures. Additionally, a recent U.S. tariff increase on Vietnamese goods has exerted further downward pressure on the VND, as Vietnam adjusts its currency to remain competitive in exports.
Economists suggest that with the Federal Reserve's rate cut in September easing pressure on the VND, there may be limited opportunities for stabilization going forward. The convergence of these factors creates a complex interplay for both currencies, making it essential for businesses and individuals engaged in international transactions to closely monitor forthcoming economic data and central bank actions as they prepare for potential shifts in the USD/VND exchange rate.
