The US dollar fell sharply at the start of the week.

The US dollar fell sharply at the start of the week.

After surpassing the 24,000 VND/USD mark on the selling side, the USD/VND exchange rate has been fluctuating frequently, with alternating periods of increases and decreases. In the first trading session of the new week, the USD continued this trend. At some banks, the USD/VND exchange rate fell very sharply.

The USD/VND exchange rate at Vietnam Joint Stock Commercial Bank for Industry and Trade ( VietinBank ) experienced the sharpest decline. The rate was listed at 23,880 VND/USD – 24,220 VND/USD, a decrease of 100 VND/USD, equivalent to 0.42%, in both buying and selling rates compared to the end of last week.

Techcombank (Vietnam Technological and Commercial Bank) also significantly reduced the value of the US dollar. The exchange rate at Techcombank was 23,890 VND/USD – 24,227 VND/USD, a decrease of 50 VND/USD for buying and 51 VND/USD for selling.

USD drops sharply at the beginning of the week (Figure 1) — In early week trading, the USD/VND exchange rate experienced a sharp drop at some banks and remained stable in the free market. (Illustrative image)

At Vietnam Foreign Trade Commercial Bank ( Vietcombank ), the US dollar is trading at: 23,885 VND/USD – 24,225 VND/USD, a decrease of 35 VND/USD.

The USD/VND exchange rate at Orient Commercial Bank (OCB) is trading at 23,918 VND/USD – 24,388 VND/USD, a decrease of 10 VND/USD for the buying rate and 5 VND/USD for the selling rate. OCB's selling price for USD is typically the highest in the market.

Meanwhile, on the free market, the US dollar remained relatively stable compared to the end of last week. In Hang Bac and Ha Trung – Hanoi's "foreign exchange streets" – the USD/VND exchange rate is currently trading at 24,100 VND/USD – 24,170 VND/USD.

The US dollar is weaker in Asian markets.

As can be seen, the USD/VND exchange rate is moving in the same direction as the US dollar in the Asian market. The US dollar is weakening against several major currencies.

The yen strengthened on Monday as comments from Bank of Japan (BOJ) Governor Kazuo Ueda raised hopes that Japan could soon herald a new era away from negative interest rates, while the dollar weakened ahead of this week's US inflation data.

The Japanese yen rose nearly 0.8% at one point to touch a session high of 146.66 per dollar in early Asian trading, boosted by weekend comments from Ueda that the central bank could end its negative interest rate policy once its 2% inflation target is in sight.

Ueda told the Yomiuri newspaper in an interview that the BOJ may have enough data by the end of the year to determine whether it can end negative interest rates.

The yen has been under significant pressure against the dollar due to the widening interest rate differential with the United States, ever since the Federal Reserve began its aggressive rate-raising cycle last year while the BOJ remained a dovish exception.

Matt Simpson, senior market analyst at City Index, said: “Ueda is laying the groundwork for a move away from negative interest rates and he’s making a lot of announcements.”

Elsewhere, the greenback fell much lower, a far cry from its three-month highs against the euro and pound sterling reached last week.

The euro rose 0.13% to $1.0714, after ending Friday with an eight-week losing streak. The British pound also gained 0.16% to $1.2486.

The dollar index, which peaked last week with eight consecutive weeks of gains—its longest streak since 2014—has edged lower to 104.84.

The offshore yuan rose about 0.1% to 7.3587 per dollar, although it remains not far from Friday's 10-month low of 7.3678 per dollar, as sentiment about China's stalling economic recovery remains fragile.

The Australian dollar, often used as a liquidity proxy for the yuan, rose 0.29% to $0.6397, while the New Zealand dollar edged higher, gaining 0.28% to $0.5900.

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