Forecast of USD trend in 2025

(NLĐO) - In its latest economic update report, Standard Chartered forecasts that the US dollar will strengthen significantly in 2025 but will weaken in the early part of the year.

Standard Chartered Bank has just forecast that Vietnam's GDP will grow strongly by 6.7% in 2025 (7.5% year-on-year growth in the first half and 6.1% in the second half).

Tim Leelahaphan, Regional Economist for Thailand and Vietnam at Standard Chartered.

The US dollar is expected to strengthen significantly in the second half of 2025 as tariff and fiscal policies under President Trump's second term are clarified and implemented. In the long term, the sustainability of macroeconomic stimulus measures will affect the strength of the dollar. Domestic and foreign investors may shift to inflation-hedging assets if uncertainty persists.

The US dollar may face a period of weakness in early 2025 due to the Federal Reserve's continued interest rate cuts and uncertainty surrounding policy implementation. The lingering effects of interest rate hikes and the strengthening dollar since October 2024 could put further pressure on the currency.

The Fed's recent interest rate cuts were expected to support Asian currencies, including the Vietnamese dong. However, better-than-expected US economic data has increased pressure on Asian foreign exchange markets. Factors such as uncertainty in trade policy and potentially inflationary measures under President Donald Trump could undermine monetary policy stability in the region.

According to Standard Chartered's economic experts, Vietnam continues to experience strong growth. Exports increased by 14.9% year-on-year in the first 10 months of 2024, while imports rose by 16.8%; with the electronics import-export sector continuing its recovery. Solid growth in the manufacturing sector, coupled with appropriate monetary policy, has also contributed to the economic recovery since the beginning of the year. Foreign direct investment (FDI) continues to increase. Disbursed FDI increased by 8.8% year-on-year, while committed FDI increased by 1.9% during the same period. The manufacturing sector accounted for 62.6% of total committed FDI during that period, while the real estate sector accounted for 19.0%, an increase year-on-year.

Tim Leelahaphan, Regional Economist for Thailand and Vietnam at Standard Chartered, said: "We expect the State Bank of Vietnam (SBV) to raise interest rates by another 50 basis points in Q2 2025. The government's expectation of strong economic growth is supporting the current low interest rates. Inflation may rebound starting in Q2 2025; therefore, we expect interest rates to return to normal in Q2. The Fed's actions will also be a key factor influencing the SBV's monetary policy decisions. Lower USD interest rates could help reduce capital outflows, while a sustained trade surplus and strong foreign exchange earnings from the tourism sector will support the VND; however, low import reserves remain a challenge."

Standard Chartered forecasts that the Fed's interest rate cuts could lead to a weakening trend for the US dollar in the next few quarters, resulting in an USD/VND exchange rate of 25,250 by the end of 2024 and 25,450 in the second quarter of 2025.

The Asian Development Outlook (ADO) report, released by the Asian Development Bank (ADB) on December 11-12, highlights how changes in US trade, fiscal, and immigration policies could dampen growth and increase inflation in developing Asia and the Pacific .

Under the high-risk scenario, the ADB forecasts that drastic US policy changes could slightly dampen global economic growth over the next four years by a cumulative 0.5 percentage points.

Vietnam's growth forecast has been revised upwards to 6.4% in 2024, compared to the previous forecast of 6%; and to 6.6% in 2025, compared to 6.2%. Stronger-than-expected trade activity, a robust recovery in manufacturing for export, and continued implementation of fiscal support measures have boosted economic growth. Amid increasing external challenges, increased public investment and fiscal and monetary support policies are necessary measures to further stimulate domestic demand.

Source: https://nld.com.vn/du-bao-xu-huong-dong-usd-trong-nam-2025-196241212111051848.htm