Free USD price drops sharply

With today's sharp drop, the USD price on the free market has cooled down by nearly 300 VND in the past two weeks, falling deep below the 26,000 VND range.

On July 16, foreign currency exchange points in the free market continued to sharply reduce the USD price by 80-90 VND compared to yesterday. Currently, USD price on the black market traded around 25,620 - 25,690 VND.

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

Meanwhile, in the official market, the USD price is still stable and moving sideways. Each USD is bought and sold by Viectombank at 25,120 - 25,460 VND. BIDV pegged the exchange rate at 25,237 - 25,457 VND, Eximbank listed it at 25,160 - 25,457 VND per dollar.

The decline in the domestic USD price is also consistent with the development of the USD Index - an index measuring the strength of the greenback over the past two weeks. The greenback index has decreased by 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 by 0.25% in September and December this year. Under this scenario, this is a favorable basis for other economies to consider cutting or not raising policy rates, while the exchange rate pressure on emerging currencies will also be reduced. However, UOB also noted the possibility that USD interest rates will remain high for a longer period of time in the next few years.

UOB forecasts the USD Idex will gradually decline to 100 points in the second quarter of next year.

Forecasting the trend of the USD/VND exchange rate in the coming time, Mr. Suan Teck Kin, Director of Global Market and Economic Research, UOB Group said: "In the scenario where the Fed will cut interest rates in September and December this year, we see the possibility that the USD will depreciate in the second half of the year."

Accordingly, UOB experts believe that the dong may recover in the second half of the year along with the rise of the yuan and the weakening of the USD across the board when the Fed's interest rate cut is emphasized. Specifically, the dong is forecast to gradually strengthen against the USD to 25,200 VND in the third quarter; 24,800 VND in the first quarter of 2025 and 24,600 VND in the second quarter of next year.

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