USD/VND Outlook:
Slightly weaker, but likely to move sideways as the rate is below the recent average and near recent lows.
Key drivers:
• Rate gap: The Federal Reserve's recent decision to maintain interest rates reflects a cautious economic outlook, while the State Bank of Vietnam is likely to stabilize the VND amid increasing liquidity concerns.
• Risk/commodities: Global oil prices are currently below average, impacting trade balances and limiting the VND's strength against the USD.
• One macro factor: Upcoming legislative elections in Vietnam could influence economic policies that may support the VND moving forward.
Range:
The USD/VND is expected to hold within its recent range as it fluctuates near recent lows.
What could change it:
• Upside risk: A stronger-than-expected U.S. jobs report could boost the USD.
• Downside risk: Continued geopolitical tensions impacting the USD may lead to further declines.