Vietnam’s currency edged up slightly against the U.S. dollar on Wednesday, reflecting cautious optimism in the domestic market and growing investor anxiety about the global economic outlook.

VND Strengthens on Both Official and Unofficial Markets

Vietcombank, Vietnam’s largest state-owned lender, quoted the dollar at VND26,140, down 0.04% from Tuesday. On the unofficial market, the greenback slipped 0.11% to VND26,500, signaling a mild retreat in demand.

Meanwhile, the State Bank of Vietnam (SBV) adjusted its reference rate down 0.03% to VND24,930, maintaining a strategy of gradual currency stabilization amid regional volatility and shifting capital flows.

Dollar Under Pressure Globally

The dip in Vietnam’s dollar exchange rates mirrors broader trends. Globally, the U.S. dollar remained soft ahead of a pivotal Federal Reserve policy meeting, where investors are eagerly watching for signals about interest rate direction amid ongoing concerns over slowing U.S. growth and sticky inflation.

The dollar index held steady after declining for three consecutive sessions, while the euro edged down 0.2% to $1.1338. In Asia, the Japanese yen lost 0.5%, snapping a three-day rally as Japanese markets reopened after a holiday. The Hong Kong dollar also moved modestly away from the strong end of its currency peg.

Analysts say uncertainty continues to weigh on the greenback. “We’re seeing a micro bounce in the dollar ahead of trade talks, but the broader narrative is still one of weakness,” said Tony Sycamore, market analyst at IG. “There’s a real question among international investors about whether they want to remain overweight in U.S. equities.”

Vietnam Holds Steady Amid Global Shifts

Vietnam’s central bank has so far managed to walk a fine line—keeping the dong relatively stable while supporting export competitiveness and mitigating inflation risks. The gradual appreciation of the VND also signals growing confidence in the country’s economic fundamentals and currency management, even as global capital flows remain uncertain.

With external headwinds—from tightening global liquidity to rising geopolitical tensions—Vietnamese policymakers are expected to maintain a cautious but flexible approach to forex policy in the coming months.

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Source: Vietnam Insider

Analysts predict that most Asian currencies will weaken, with the Indonesian rupiah and Philippine peso being the most vulnerable. The survey, conducted before the US May inflation report and the Federal Reserve’s monetary policy meeting, indicated that stable prices and the Fed’s decision to delay interest rate cuts until December will continue to pressure these currencies.

Maybank analysts noted that the USD is likely to remain strong due to unclear inflation trends and cautious market sentiment. They emphasized that prolonged high US interest rates will not benefit Asian currencies.

HSBC analysts foresee sustained pressure on the Indonesian rupiah, possibly prompting the Central Bank of Indonesia to raise interest rates further. Similarly, the Philippine peso faces increased shorting predictions as the central bank hints at potential rate cuts in August, which could exacerbate downward pressure ahead of the Fed’s actions.

The Indian rupee, despite being one of the region’s best-performing currencies this year, is also expected to decline due to external pressures like high interest rates and geopolitical tensions in the Middle East. Forecasts for the Korean won and Singapore dollar have worsened, while predictions for the Chinese yuan and Thai baht have slightly improved.

The Asia Currency Positioning Poll reflects the current market stance on nine Asian emerging market currencies: Chinese yuan, Korean won, Singapore dollar, Indonesian rupiah, Indian rupee, Philippine peso, Malaysian ringgit, and Thai baht.

@Reuters

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Source: Vietnam Insider

The USD index, which compares the dollar to other major currencies, decreased 0.2% to 102.4918 during this session.

The “hawkish” comments made by the ECB President during this session were an influence on the USD. Lagarde predicted that inflation in the Eurozone will continue to be too high for a very long time while speaking at an annual meeting of major central banks held in Portugal.

She said that policymakers were “uncertain” as to when interest rates will peak.

The British pound increased to 1.2751 U.S. dollars from 1.2721 dollars in the previous session during the late New York trading, and the euro increased to 1.0960 U.S. dollars from 1.0915 dollars.

This session’s currency rate of 1 USD for 144,0130 Japanese Yen was lower than the previous session’s exchange rate of 143.4470 Japanese Yen for 1 USD, indicating that the yen remained still weak.

After news that US consumer confidence increased to a one-and-a-half-year high, the decline in the dollar was slightly restrained.

The US consumer confidence index, therefore, increased from 102.5 in May to 109.7 in June, according to survey findings from the Conference Board that were made public on June 27. This was the highest level since January 2022. In the survey conducted last month, consumer inflation forecasts for the coming 12 months dropped from 6.1% to 6.0%, the lowest level since December 2020.

However, US consumers continue to believe that a recession is a possibility for the economy during the next 6 to 12 months.

@vtv.vn

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Source: Vietnam Insider