Dollar continues strengthening versus Vietnamese dong

The U.S. dollar continued to appreciate against the Vietnamese dong on Wednesday amid rising domestic forex demand and the greenback’s strengthening on global markets.

On Wednesday, the State Bank of Vietnam, the country’s central bank, raised its benchmark USD/VND exchange rate by VND10 to VND24,250 a dollar, marking the eighth consecutive daily increase.

With a regulatory trading band of ±5%, local banks can quote the USD at VND23,037-25,462 a dollar.

Commercial banks were offering the USD at the upper band. State-controlled Vietcombank, the largest forex trader in the country, quoted the greenback at VND25,190-25,462 a dollar for bids and asks, up VND18-10 from Tuesday, respectively.

Similarly, privately-run Techcombank raised its offer to VND25,224-25,462 from VND25,207-25,452 on Tuesday.

On the free market, gold stores lifted their quotes by VND60 to VND25,520-25,620.

The State Treasury of Vietnam bought a combined $700 million this month, while local businesses have more robust demand for forex to cover import bills by the year-end.

The U.S. Dollar Index (DXY), which tracks the USD against six other key currencies, is trading up 0.22% at 104.30, the highest since late July. The index has risen 3.5% since the start of this month, according to MarketWatch.

The dollar’s appreciation comes as market participants increasingly expect the U.S. Fed to slow down its interest rate cut cycle, given slowly cooling inflation.