EUR/VND Outlook:
Slightly positive, but likely to move sideways, as the rate is just above its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The European Central Bank has kept interest rates stable, while the Vietnamese central bank is influenced by upcoming legislative elections, creating uncertainty.
• Risk/commodities: Rising oil prices are supporting the euro's value, but the correlation with the US dollar is creating headwinds for the EUR.
• One macro factor: The eurozone's inflation has fallen below the ECB's target, leading to speculation about future rate cuts which could limit euro strength.
Range:
EUR/VND is likely to hold within the recent range, with relatively stable movement expected.
What could change it:
• Upside risk: A resolution in the Russia-Ukraine conflict could boost investor confidence and strengthen the euro.
• Downside risk: A significant drop in inflation or further geopolitical tensions could weaken the euro against the VND.
