USD price ends 2023 in disappointment

How much is 1 USD in VND today?

Vietcombank Euro exchange rate is currently at 26,106 VND - 27,539 VND (buy - sell).

The current Japanese Yen exchange rate is 166.10 VND - 175.83 VND (buy - sell).

The British Pound exchange rate is currently at 30,014 VND - 31,292 VND (buy - sell).

Today's Yuan exchange rate is at 3,340 VND - 3,483 VND (buy - sell).

USD price today

The US Dollar Index (DXY) measures the greenback's fluctuations against six major currencies (EUR, JPY, GBP, CAD, SEK, CHF), recording at 101.21 points.

In the final week of 2023, the USD recorded its first annual decline since 2020. The reason was due to expectations that the US Federal Reserve will start cutting interest rates next year as inflation moderates.

The Federal Reserve has recently adopted a dovish stance, a sign that the Fed’s war on inflation is coming to an end. Looking ahead to 2024, there are a few things that are being discussed in the market. First, when the Fed will start cutting interest rates. Second, the purpose of the policy easing: to avoid over-tightening policy due to inflation, or because of slowing US economic growth.

The dollar was also a topic of discussion. Taking into account recent losses, the DXY index was down about 4.21% in the fourth quarter and about 1.75% in December. The USD Index fell 0.48% to 100.98, its lowest since July 27, before recovering slightly. However, on a yearly basis, the dollar was down 2.42%, ending two consecutive years of gains.

The market believes that the first interest rate cut by the FED will take place in March 2024. By December next year, interest rates are expected to decrease by 155 basis points.

“The market is getting more positive as the Fed eases policy,” said Marc Chandler, market expert at Bannockburn Global Forex.

In Europe, the outlook for rate cuts is lower than in the US. However, the market still prices the European Central Bank for a 162 basis point cut, while the Bank of England is expected to cut by 148 basis points in 2024.

The pound rose 0.08% to $1.2745. The currency is on track for a 5.39% annual gain - its best performance since 2017.

The yen is on track to rise 7.56% on expectations that Japan will exit its negative interest rate policy next year. During the year, the yen had a sharp decline, with the exchange rate expanding as the market assumed Japan would buy it back. However, near the end of the year, the Japanese currency unexpectedly bounced back on speculation that the BOJ would end its negative interest rate policy.

“Japan’s outlook is encouraging in 2024, with expectations of strong economic growth and sustained improvement in inflation,” said Aadish Kumar, international economist at T. Rowe Price.

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