US Dollar Gains on Dong, Weakens Globally
The US dollar strengthened against Vietnam's dong on Friday, even as global currency markets saw the greenback lose ground against major peers.
Dong-Dollar Dynamics Diverge
The US dollar strengthened against the Vietnamese dong on Friday, September 4. Vietcombank sold the greenback at VND26,285, marking a 0.1% increase from Thursday's close. Conversely, on the unofficial black market, the dollar saw a 0.23% decline, trading around VND25,810. This implies a strengthening of the dong in parallel trading.
The State Bank of Vietnam (SBV) simultaneously adjusted its reference rate, reducing it by 0.04% to VND25,605. This move demonstrates the central bank is managing the dong's value amidst global currency shifts.
Global Dollar Retreat
Globally, the US dollar experienced broader weakness on Friday, despite its gain against the dong. The dollar index, which measures the greenback against a basket of major currencies, fell to 98.96. This followed a 0.6% overnight slide and placed the dollar on track for a 0.7% weekly decline, Reuters reported.
A senior Federal Reserve official's comments helped cool fears of aggressive rate increases, contributing to the dollar's global retreat. Asian equities responded positively, with shares rising as investors embraced a wider market rally. The Japanese yen gained 2.6% this week, trading at 155.7 per dollar, nearing the 155.2 level.
Market attention now shifts to upcoming US economic data, particularly nonfarm payrolls expected later on Friday and CPI inflation next week. These releases precede the Federal Open Market Committee (FOMC) meeting scheduled for September 15–16.
Markets currently price a 75% probability of a September rate increase, with an October increase fully factored in, raising the prospect of further monetary tightening. Tony Sycamore, an analyst at IG, suggested this dollar weakness could reflect pre-positioning, either official or speculative.
This anticipates potentially softer nonfarm payrolls or a hawkish Bank of Japan (BOJ) meeting in two weeks. For Asian economies like Vietnam, a globally weaker dollar could ease import costs, but local currency management remains crucial to balance trade and capital flows against shifting global monetary policy expectations.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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