USD price rises, FED may cut interest rates

With the USD rising, the Fed may cut interest rates. — The US dollar continued its upward trend this week. (Illustration: Tra My)

What is the exchange rate of 1 USD to VND today?

The exchange rate set by the State Bank of Vietnam is 23,976 VND/USD.

The current USD exchange rate at Vietcombank is 24,260 VND - 24,630 VND (buying rate - selling rate).

The current Euro exchange rate at Vietcombank is 26,137 VND - 27,572 VND (buying rate - selling rate).

The current exchange rate for the Japanese Yen is 163.45 VND - 173.00 VND (buying rate - selling rate).

The current exchange rate for the British Pound is 30,398 VND - 31,692 VND (buying rate - selling rate).

The exchange rate for the Chinese Yuan today is 3,343 VND - 3,486 VND (buying rate - selling rate).

Today's USD exchange rate

The US Dollar Index (DXY), which measures the fluctuations of the US dollar against six major currencies (EUR, JPY, GBP, CAD, SEK, CHF), recorded a level of 102.40 points.

The USD price stalled at the beginning of the week, interrupting its upward trend. However, on Wednesday, the USD continued to climb, maintaining its growth momentum from the beginning of the year. The focus of the foreign exchange market last week was US economic data to predict when the Federal Reserve might cut interest rates.

Accordingly, US consumer prices rose in December due to a 0.3% increase in rents during the month and a 3.4% increase year-on-year. The US Producer Price Index (PPI) unexpectedly fell 0.1% last month. This further fueled market optimism, suggesting the Fed will soon cut interest rates.

Earlier in December 2023, the USD Index hit a five-month low as inflation neared its annual 2% target and US economic data showed signs of weakening. A sell-off of the dollar was predicted later this year. Expectations regarding the Fed could continue to fuel the USD price.

The CME Fed Watch tool shows that, despite the hawkish message from Fed officials leaving open the possibility of tightening policy, the market still believes the Federal Reserve will cut interest rates in March. The current probability is 79%.

According to Cleveland Fed President Loretta Mester, based on the latest CPI data, it is still too early to cut the policy interest rate in March. Richmond Fed President Thomas Barkin commented that this data does not help clarify the inflation trend.

Jane Foley, senior foreign exchange expert at Rabobank, commented: “Despite market price adjustments this year, in our view, investors remain overly optimistic about a Fed interest rate cut. This outlook will be subject to adjustment. Therefore, the USD will continue to be supported for the next 1-3 months. The EUR/USD rate will fall to 1.05 in 3 months before the Fed cuts interest rates in the second half of the year, pushing the USD lower.”

Steve Englander, a G10 foreign exchange expert at Standard Chartered Bank's New York branch, said: "Overall, the macroeconomic picture isn't at a point where interest rates need cutting, but the market is very excited about it."

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