US dollar prices cool in Vietnam as Fed likely to cut rates

Prices of the U.S. dollar have been going down in Vietnam in recent days as the U.S. central bank mulls rate cuts soon.

The State Bank of Vietnam (SBV) on Friday lowered its central reference USD/VND exchange rate by VND3 to VND24,242 a dollar. Commercial banks can quote the greenback in the range of VND23,030-25,454 a dollar at this rate.

The Vietnamese central bank, however, kept its buying and selling prices unchanged at VND23,400-25,450 a dollar.

At commercial banks, USD prices fell and stayed quote far below the regulatory ceiling.

Vietcombank, the largest forex trader in the country, quoted the greenback at VND25,030-25,400 for bids and asks, respectively, unchanged from Thursday. BIDV, another state-run lender, offered the dollar at VND25,060-25,400.

Privately-run Techcombank was selling the dollar at VND25,368, easing from VND25,377 on Thursday.

Asking prices at banks have dropped circa VND65 from those a month ago.

On the free market, gold shops quoted the U.S. dollar at VND25,600-25,700 on Friday.

USD prices have eased markedly since last month, but they have still increased by 4%-plus since the start of this year.

The U.S. Dollar Index (DXY), which measures the strength of the greenback, was trading 0.24% lower at 104.18 on Friday.

Analysts and traders expect the U.S. Federal Reserve (Fed) to cut its rates once or twice later this year, sending the greenback lower.

With the DXY downward projections, K.B. Securities Vietnam has forecast the USD/VND exchange rate will stabilize soon and end the year up 3.5%, or VND25,120 a dollar.

Meanwhile, Viet Dragon Securities has noted that the SBV sold modest quantities of foreign currency in the first days of July. However, the USD/VND rate will likely undergo pressure again in late Q3 and early Q4 of this year.

Singapore-based lender UOB in June updated its USD/VND forecasts at 25,200 in Q3/2024, 25,000 in Q4/2024, 24,800 in Q1/2025 and 24,600 in Q2/2025.