USD/VND Outlook: Likely to move sideways, as the rate is near its recent average and mixed signals are presenting uncertainty.
Key drivers:
• Rate gap: The Federal Reserve's recent interest rate cuts may ease the USD's strength compared to the State Bank of Vietnam, which has maintained a more stable approach.
• Risk/commodities: Current oil prices remain volatile, and if they rise significantly, it could impact USD strength and indirectly influence the VND.
• One macro factor: The IMF's revaluation of the Vietnamese Đồng sets it at a stronger position against the USD, enhancing Vietnam's trade outlook.
Range: The USD/VND rate is likely to hold within its recent 3-month band, moving gradually without major fluctuations.
What could change it:
• Upside risk: A stronger-than-expected core PCE price index could boost the USD if it signals persistent inflation.
• Downside risk: Increased geopolitical tensions or tariff uncertainties could heighten market caution, negatively affecting the USD.
