The free market USD exchange rate has fallen sharply.

With today's sharp decline, the USD price on the free market has cooled down by nearly 300 dong in the past two weeks, falling well below the 26,000 dong mark.

On July 16th, foreign exchange bureaus in the free market continued to sharply reduce the USD price by 80-90 dong compared to yesterday. Currently, USD price On the black market, it is trading around 25,620 - 25,690 VND.

Accumulating over several sessions in a downward trend, each USD on the free market has now decreased by 300 VND compared to the beginning of this month.

Meanwhile, on the official market, the USD exchange rate remains stable and sideways. Vietcombank is buying and selling each USD at 25,120 - 25,460 VND. BIDV is pegging the exchange rate at 25,237 - 25,457 VND, and Eximbank is listing it at 25,160 - 25,457 VND per dollar.

The decline in the domestic USD price also aligns with the movement of the USD Index – an index measuring the strength of the US dollar – over the past two weeks. The US dollar index has fallen 1.6% since the beginning of the month, currently trading around 104.3 points.

According to UOB Bank's forecast, the US Federal Reserve (Fed) will cut interest rates twice, each time by 0.25%, in September and December of this year. Under this scenario, it provides a favorable basis for other economies to consider cutting or not raising policy interest rates, while also easing exchange rate pressure on emerging currencies. However, UOB also notes the possibility that USD interest rates will remain high for a longer period in the coming years.

UOB forecasts that the USD Index will gradually decline towards 100 points by the second quarter of next year.

Forecasting the trend of the USD/VND exchange rate in the near future, Mr. Suan Teck Kin, Director of Global Market and Economic Research at UOB Group, said: "In the scenario where the Fed cuts interest rates in September and December this year, we see the possibility of the USD depreciating in the second half of the year."

Accordingly, UOB experts predict that the Vietnamese dong could recover in the second half of the year along with the appreciation of the Chinese yuan and the broader weakening of the USD as the Fed focuses on interest rate cuts. Specifically, the dong is projected to gradually strengthen against the USD to 25,200 dong in the third quarter; 24,800 dong in the first quarter of 2025 and 24,600 dong in the second quarter of next year.

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