USD/VND Outlook: The outlook is slightly weaker, but likely to move sideways as the rate is below its recent average and held stable within the recent range.
Key drivers:
• Rate gap: The Federal Reserve has paused its rate cuts, contrasting with expectations in Vietnam where economic policies remain cautious.
• Risk/commodities: Over recent months, oil prices have shown volatility, impacting the USD, as U.S. geopolitical tensions have driven a flight to safer assets.
• One macro factor: The IMF's recent approval of a revaluation for the Vietnamese Đồng could further influence its stability in international trade.
Range: USD/VND is expected to hold within its recent range, with limited movement as it adjusts to new information.
What could change it:
• Upside risk: A significant positive surprise in U.S. economic data could bolster the USD against the VND.
• Downside risk: Continued geopolitical tensions that lead to a greater investor shift away from U.S. assets could put downward pressure on the USD.
