The global USD price has fallen sharply, up to 70 times more than the domestic price.

USD hits a 6-week low in global markets.

This week, the focus of all markets is the Federal Reserve's (FED) decision on US dollar interest rates. The FED's announcement that it will continue not to raise USD interest rates has caused the currency to fall sharply.

The dollar fell to a six-week low on Friday. The dollar index, a measure of the greenback's value against six major currencies, dropped 1.1% to 105.03, after earlier falling to 104.93, its lowest level since September 20. The index is on track for its biggest one-day decline since July.

Overall for the week, the dollar fell 1.4%, marking its worst week since July.

Following the Fed's announcement that it would not raise interest rates, the US dollar fell sharply in global markets, reaching a six-week low, but the USD/VND exchange rate only decreased slightly. The drop in the US dollar's value in the global market was 70 times more significant than in the domestic market. (Illustrative image)

Besides the Fed, the employment situation is also not supportive of the USD. Data showed that non- farm payrolls increased by 150,000 jobs last month. The September figures were revised downward, showing 297,000 jobs created instead of the previously reported 336,000.

Ronald Temple, chief market strategist at Lazard in New York, said: “In my view, the Fed’s interest rate hike cycle has ended, and this reaffirms the view that the Fed should not raise interest rates again.”

During the week, the dollar fell 0.2% against the yen, its largest weekly decline since late July.

The yen fell at the start of the week after the Bank of Japan adjusted its yield curve control policy on Tuesday, but not as much as the market had expected.

Kazuo Ueda, the central bank governor, will continue to dismantle his ultra-loose monetary policy and seek to exit decades of easing next year, Reuters reported on Thursday, according to six sources familiar with the central bank's thinking.

Meanwhile, the British pound appreciated after the Bank of England kept interest rates at their highest level in 15 years and stressed that it did not expect to begin cutting rates anytime soon.

The British pound rose 0.6% against the dollar to $1.2225, its highest level in 1.5 weeks, after the Bank of England voted 6-3 to keep interest rates stable at 5.25%, while ruling out an early rate cut. The pound ultimately rose 0.4% to $1.2201.

The Australian dollar, often used as a barometer for risk appetite, rose 0.54% on Thursday, while the New Zealand dollar gained 0.8%.

The global USD price has fallen sharply, up to 70 times more than the domestic price.

While the dollar index fell by 1.4% this week, the USD/VND exchange rate decreased only slightly, ranging from 0.02% to 0.16%. Thus, the rate of decline for the US dollar in the global market was 4.7 times to 70 times faster than in the domestic market.

Specifically, at Vietnam Foreign Trade Commercial Bank ( Vietcombank ), the USD/VND exchange rate closed this week at: 24,320 VND/USD – 24,690 VND/USD, a decrease of 40 VND/USD, equivalent to 0.16% compared to the end of last week.

The USD/VND exchange rate at the Vietnam Investment and Development Bank (BIDV) closed the first week of November at: 24,415 VND/USD – 24,715 VND/USD, a decrease of 5 VND/USD, equivalent to 0.02%.

Orient Commercial Bank (OCB) continues to maintain its position as the bank with the highest selling price in the market at 24,857 VND/USD. The USD/VND exchange rate at OCB closed at: 24,396 VND/USD – 24,857 VND/USD, a decrease of 10 VND/USD in the buying rate and a decrease of 11 VND/USD in the selling rate, equivalent to 0.04%.

Techcombank (Vietnam Technological and Commercial Bank) listed the exchange rate at: 24,328 VND/USD – 24,684 VND/USD, a decrease of 73 VND/USD for the buying rate (equivalent to 0.3%) and a decrease of 61 VND/USD for the selling rate (equivalent to 0.25%).

As can be seen, the USD/VND exchange rate is not only under pressure from the sharp decline of the US dollar in the global market but also faces the continuous and significant drop in Vietnamese dong interest rates.

Currently, deposit interest rates have all hit new lows, significantly lower than 6% per year.

Source: https://www.congluan.vn/fed-khong-tang-lai-suat-gia-usd-the-gioi-giam-manh-gap-70-lan-trong-nuoc-post271087.html