The US dollar enters the new year 2024 facing several challenges. One of them is the expectation that the Federal Reserve (Fed) will soon cut interest rates, thereby reducing the value of the USD.
However, in the first week of 2024, the opposite happened. The US dollar surged globally. Specifically, the USD/VND exchange rate increased sharply, almost doubling compared to the global market.
The USD/VND exchange rate increased by 0.66%.
At the close of the last trading session of the first week of 2024, the USD/VND exchange rate at Vietnam Joint Stock Commercial Bank for Industry and Trade ( VietinBank ) ended the week at: 24,160 VND/USD – 24,580 VND/USD, an increase of 155 VND/USD, equivalent to 0.66% compared to the end of 2023.
During the first trading week of the new year 2024, the US dollar was surging globally. The USD/VND exchange rate, in particular, increased sharply, nearly doubling compared to the global market. (Illustrative image)
The USD/VND exchange rate at Vietnam Foreign Trade Commercial Bank (Vietcombank) is trading at: 24,190 VND/USD – 24,530 VND/USD, an increase of 110 VND/USD, equivalent to 0.46% in both buying and selling rates.
After one week of trading, the Vietnam Investment and Development Bank (BIDV) adjusted the USD/VND exchange rate, increasing it by 95 VND/USD in both buying and selling directions to 24,205 VND/USD – 24,505 VND/USD.
The USD/VND exchange rate at the Vietnam Agricultural and Rural Development Bank (Agribank) closed the first week of the new year at: 24,190 VND/USD – 24,510 VND/USD, an increase of 90 VND/USD.
Techcombank (Vietnam Technological and Commercial Bank) adjusted the USD/VND exchange rate, increasing it by 110 VND/USD for buying and 97 VND/USD for selling, to 24,220 VND/USD – 24,527 VND/USD.
Orient Commercial Bank (OCB) listed the USD exchange rate at: 24,234 VND/USD – 24,490 VND/USD, an increase of 103 VND/USD for buying and 99 VND/USD for selling.
As can be seen, in the first week of the new year 2024, the US dollar has clearly heated up. The USD/VND exchange rate increased from 0.46% to 0.66% depending on the bank. This rate is significantly higher than the upward trend of the US dollar in the global market.
The US dollar rose 0.25% globally.
The dollar rose on Friday, heading for its strongest weekly gain since May as traders scaled back expectations of an early US interest rate cut this year.
The strong start of the US dollar cast a dark shadow over the euro even as rising inflation in the eurozone appeared to ease market pressure on the European Central Bank (ECB) to cut interest rates.
The dollar's recovery will be tested by the non-farm payrolls report, which will be released later on Friday.
Fed officials in December projected a 75-basis-point interest rate cut in 2024. Money markets are expecting double that amount, with such expectations driving stocks and bonds higher towards the end of the year.
But since the beginning of the year, the market has tempered its expectations. The CME FedWatch tool shows that traders are now pricing in a rate cut of less than 140 basis points this year, with the probability of a March cut at 62%, down from 86% a week earlier.
The dollar ultimately rose 0.25% against a basket of currencies to 102.69, after hitting a new three-week high. The index gained 1.3% for the week, its strongest gain since the week ending May 15.
The euro fell 0.24% to $1.0919 and is on track for a 1.09% weekly decline, its sharpest weekly drop since early December and ending a three-week winning streak.
Inflation across the 20-nation bloc rose to 2.9% in December from 2.4% in November, just below expectations of 3.0%.
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