USD/VND Outlook:
USD/VND is likely to move sideways as it is currently near its 3-month average and trading within a stable range. Recent geopolitical tensions have heightened demand for USD, but the lack of a strong upward driver may keep the rate stable.
Key drivers:
• Rate gap: The US Federal Reserve's hawkish stance contrasts with Vietnam’s cautious monetary policy, keeping demand for USD strong.
• Risk/commodities: Oil prices have surged, increasing global demand for USD since oil purchases are typically made in this currency.
• One macro factor: Vietnam has set an ambitious GDP growth target of 10% for 2026, but the advisory council urges caution in expanding monetary policy.
Range:
USD/VND is expected to hold steady within its recent range of 25,890 to 26,375.
What could change it:
• Upside risk: Any escalation in Middle East conflicts could increase safe-haven demand for the USD.
• Downside risk: A significant improvement in Vietnam's economic indicators could bolster the VND against the USD.
