UOB: USD continues to weaken, exchange rate reaches 26,300 VND in Q3

Specifically, UOB experts assessed that the USD experienced a volatile April, with the focus on hypotheses surrounding US President Donald Trump's "Mar-a-Lago - MALA Agreement", which is said to include trade tax measures and weaken the USD.

However, according to UOB, the real reason for the post-holiday sell-off of the USD, especially when it fell sharply against the New Taiwan Dollar (TWD), could be due to many export businesses simultaneously selling off the USD they had previously stored from export revenue.

UOB maintains its view that the USD will continue to weaken against other major currencies. This will cause the USD Index - DXY to fall to a new trading range below 100 and continue to decline to 96.9 by Q1 2026. The latest forecast also shows that the EUR/USD and GBP/USD exchange rates will continue to increase to 1.17 and 1.39 respectively by Q1 2026.

For the AUD, the V-shaped recovery may have been overdone, with UOB forecasting a more limited gain of around 0.66 in Q1 2026. The JPY, on the other hand, with the Bank of Japan (BOJ) on a more dovish path of rate hikes, will see a gradual appreciation, reaching 140 USD/JPY in Q1 2026.

For the Asian currency group, although the period of strong volatility in early April has passed, UOB experts warn that there are still many risks that can restrain the recovery momentum, such as uncertainty surrounding the results of US-China trade negotiations and the lack of clear improvement in the regional economic outlook.

UOB forecasts USD/CNY at 7.32; USD/SGD at 1.32; USD/MYR at 4.38; USD/THB at 33.5; USD/IDR at 16,800 and USD/VND at 26,300 in Q3/2025.

Regarding VND, UOB said VND was a special case in the strong recovery of regional currencies in April, when VND decreased by 1.6% in the month, down to VND25,990/USD.

According to experts, the market may have reacted to the negative economic impact on Vietnam, after the US announced a tax of up to 46% on Vietnamese goods - the second highest rate globally, after China. The manufacturing PMI also dropped sharply to 45.6 - the lowest level in 2 years, showing the cautious sentiment of manufacturers amid concerns that Vietnamese goods will lose their price competitiveness in the largest export market, the US.

“If a trade deal with the US is not reached, we expect the VND to remain in a weak range against the USD. Our updated forecasts for the USD/VND exchange rate are: 2Q2025 at VND26,100; 3Q2025 at VND26,300; 4Q2025 at VND26,000 and 1Q2026 at VND25,800,” UOB experts analyzed.

Meanwhile, on the interest rate outlook, UOB continues to maintain its view that the US Federal Reserve (Fed) will continue to ease monetary policy. Although the timing of the Fed’s rate cut has been adjusted back, UOB still forecasts that the Fed will implement three rate cuts, each of 25 basis points, this year. The timing of these three cuts will be updated at the FOMC meetings in September, October and December, thereby bringing the policy rate from 4.50% to 3.75% by the end of 2025.

Regarding the gold market, UOB experts believe that safe-haven demand will continue to be maintained, along with central banks steadily increasing their gold holdings, expectations of a weakening USD and the possibility of capital flows back to gold ETFs in the US. All these factors create positive conditions for gold prices. Therefore, UOB experts maintain a positive view and raise their gold price forecast to USD 3,600/ounce in the first quarter of 2026.

Source: https://nhandan.vn/uob-dong-usd-tiep-tuc-suy-yeu-ty-gia-dat-26300-dong-trong-quy-3-post879381.html