Bias: The USD/VND exchange rate is range-bound, as it is near the 90-day average and within the middle of the 3-month range.
Key drivers:
- Rate gap: The Federal Reserve's recent interest rate cuts are expected to reduce USD support, while the Vietnamese central bank is maintaining a cautious monetary stance.
- Risk/commodities: Oil prices remain volatile, which can affect both economies, but the impact on the VND may be mitigated by ongoing growth forecasts for Vietnam.
- Macro factor: The IMF's approval of a currency adjustment for the VND could reshape trade dynamics and add upward pressure on the currency moving forward.
Range: The USD/VND is likely to hold steady within the recent range, given its stable position around current levels.
What could change it:
- Upside risk: Stronger-than-expected GDP growth in Vietnam could strengthen the VND against the USD.
- Downside risk: Any dovish comments from Fed policymakers could reinforce USD weakness against the VND.
