On January 25, the State Bank increased the central exchange rate by 1 VND, to 24,031 VND/USD. The State Bank's transaction office kept the USD buying price unchanged at a low of 23,400 VND but the selling price was up to 25,181 VND.
Commercial banks continued to increase the USD price by 30 VND, Eximbank bought at 24,370 - 24,450 VND, sold at 24,760 VND; Vietcombank bought at 24,400 - 24,430 VND, sold at 24,770 VND... Compared to the beginning of the year, the USD price has increased by 350 VND, equivalent to an increase of 1.4%. The USD price in banks is about 350 VND lower than the free price.
USD price continues to increase
The greenback on the free market increased by 20 VND, to 25,070 VND for buying and 25,120 VND for selling. The free USD price increased, approaching the record high reached in October 2022. Although foreign currency sources at the end of the year were quite abundant and remittances skyrocketed, the high difference between domestic and foreign gold prices caused the USD price to increase faster than before.
The US dollar rose slightly on the international market, with the USD-Index up nearly 0.2 points to 103.2 points. Newly released US data showed that business activity in the country recovered in January. The market did not fluctuate much as investors waited for the US Federal Reserve's meeting next week on monetary policy, about when the Fed will begin its monetary policy easing cycle.
Investors are now awaiting the first figures on US Gross Domestic Product (GDP) for the fourth quarter, which are due for release later this week, and personal consumption expenditure (PCE) data.
Markets are pricing in a 40% chance of easing at the March meeting, down from 47% earlier this week and 80% two weeks ago. Futures traders are betting on five rate cuts of 25 basis points each in 2024.
The Bank of Canada decided to keep its overnight interest rate unchanged at 5%, saying that while underlying inflation remains a concern, it is focusing on when to cut borrowing costs rather than whether to raise rates again. The European Central Bank (ECB) holds its policy meeting on Thursday and could give clues about when the ECB will start cutting borrowing costs.
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