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Tag: US dollar

  • Vietnamese Dong Strengthens as Dollar Drops to VND26,330 at Vietcombank

    Vietnamese Dong Strengthens as Dollar Drops to VND26,330 at Vietcombank

    Vietcombank lowered its selling rate for the US dollar by 0.11 percent to VND26,330 on Tuesday morning, reflecting broad softness across international foreign exchange desks.

    The drop in official banking channels contrasted with Vietnam’s parallel market, where the greenback climbed 0.19 percent to VND25,970.

    Divergence in local currency trade

    Commercial lenders adjusted rates as global demand for the dollar faltered. Currency dealers operating in the unofficial market logged modest buying interest, keeping the gap between bank counters and private money changers unusually narrow.

    Vietnamese importers and consumer brands track these daily currency fluctuations closely to price incoming shipments of electronics, packaged goods, and retail inventory.

    Global pressures and trade sanctions

    In international currency trade, the dollar struggled to retain ground against major peers. The euro traded slightly higher at $1.1668, near a three-month high, while sterling gained 0.1 percent to $1.3639, holding near a six-month peak.

    Market participants weighed fresh policy actions from Washington, where US Treasury Secretary Scott Bessent announced an expansion of sanctions against Iran on Monday. Bessent warned foreign entities to sever commercial ties or risk expulsion from dollar clearing networks.

    Ray Attrill, head of FX strategy at National Australia Bank, noted in a podcast that the measures could trigger a modest reversal of dollar weakness seen late last week.

    Traders across Asian financial hubs are watching whether Treasury yield management and the expanded sanctions framework will halt the dollar’s downward drift before the next fixing.

  • U.S. Dollar Rallies on Black Market, Boosted by Hawkish Fed Comments

    U.S. Dollar Rallies on Black Market, Boosted by Hawkish Fed Comments

    On Thursday morning, the U.S. dollar experienced a rise against the Vietnamese dong in the black market, and also saw an increase over major currencies. The greenback saw a hike of 0.18% to VND27,800 at unofficial exchange points.

    Meanwhile, Vietcombank maintained its rate at VND26,345. The State Bank of Vietnam also held its reference rate steady at VND25,091.

    On a global scale, the dollar made gains following some hawkish comments from the Federal Reserve, settling near a two-week high at 99.09 against a selection of currencies. The Federal Reserve, on Wednesday, reduced rates by 25 basis points as anticipated and confirmed that it will conclude its balance sheet contraction on December 1.

    In other currency news, the Australian dollar saw a rise of 0.2% to $0.6588. Similarly, the New Zealand dollar also observed a gain of 0.2% to $0.5775.

    Questions & Answers

    What was the increase of the U.S. dollar against the Vietnamese dong?
    The U.S. dollar saw a rise of 0.18% against the Vietnamese dong on the black market.

    What was the reaction of the Australian and New Zealand dollars to the news?
    Both the Australian and New Zealand dollars rose 0.2%, to $0.6588 and $0.5775 respectively.

    What measures did the Federal Reserve take on Wednesday?
    The Federal Reserve lowered rates by 25 basis points as expected and announced that it will end its balance sheet drawdown on December 1.

  • Ringgit likely to trade in cautious mode this week

    Ringgit likely to trade in cautious mode this week

    The ringgit is expected to face a challenging upcoming week as the market uncertainty over trade tensions and a slowdown in the global economy encourage investors to remain risk-off. FXTM Research Global Head of Currency Strategy Jameel Ahmad said that the local unit may face the risk of falling below RM4.15 against the greenback next week.

    “The local currency has actually performed reasonably well this week during a period of heightened market uncertainty due to concerns over a global economic slowdown in 2019, and I actually would have expected the currency to fall lower due to investor reluctance to invest in emerging markets when there is significant market uncertainty,” he said.

    He said the ringgit and its emerging market peers across the globe face significant downside risks heading into the next trading week, as global financial markets continue to be gripped by market turmoil.

    “The first few days of the new trading year have not been kind to financial markets, with a number of global stocks selling off and a “flash crash” in the currency markets leading to losses in a number of currencies including the British pound, Australian dollar and Turkish lira while the Japanese yen surged across the board,” he added.

    Although the ringgit and its Asian peers got away from the flash crash in the market unscathed, he said the prolonged risk-off environment that is hurting risk appetite is encouraging expectations that emerging markets are at risk to another round of selling off.

    “I would keep a close eye on whether the ringgit falls below 4.15 next week, because this will raise market expectations that the currency of Malaysia will gradually return to the 4.20 levels over the coming weeks,” he said.

    For the week just ended, the ringgit closed mostly lower against the US dollar with market sentiment moved by global economic uncertainties and weak Purchasing Managers’ Index (PMI) data released early this week.

    On a Friday-to-Friday basis, the local note strengthened to 4.1340/1370 from 4.1500/1550 against the greenback.

    It went down against the Singapore dollar to 3.0357/0395 from 3.0336/0384 but improved against the British pound to 5.2378/2432 versus 5.2468/2548.

    Against the euro, the ringgit jumped to 4.7144/7199 from 4.7488/7550, but eased versus the Japanese yen to 3.8260/8298 from 3.7597/7653.

  • Dollar drops against yen as risk-off mood persists

    Dollar drops against yen as risk-off mood persists

    The dollar weakened against its main rivals Wednesday after a spate of weak economic data and the Federal Reserve’s Beige Book painted a troubling picture of the U.S. economy.

    The ICE U.S. Dollar Index DXY, +0.12% a measure of the dollar’s strength against a basket of six rival currencies, was down 0.5% to 94.2800.

    U.S. producer prices fell 0.5% in September, outpacing an expected decline of 0.2% from a survey of economists conducted by MarketWatch, while retail-sales increased by just 0.1% in September. A measure of retail sales in August was revised lower to show no change.

    The Fed’s Beige Book, a collection of anecdotes from business leaders in each of the Fed’s 12 regions, indicated some slowing in the economy.

    Emerging-markets currencies also put in a strong performance Wednesday, with several — including the Brazilian real USDBRL, -0.0525% South African rand USDZAR, -0.2130%  and the Turkish lira USDTRY, -0.0686% — rising nearly 2% against the dollar.

    “The combination of [the retail sales and PPI] and the pretty awful data we’ve seen thus far in September is pushing back when the Fed will hike, lowering the odds of December and raising the odds of 2016,” said Mark McCormick, a global FX strategist based in New York.

    The U.S. currency was slightly weaker against the euro EURUSD, -0.0349% which rose to $1.1473, up 0.8% from $1.1378 late Tuesday in New York — its highest level since Sept. 18, according to FactSet data.

    The greenback USDJPY, +0.25%  was at ¥118.75, down 0.8% from ¥119.74 Tuesday, its weakest level since Oct. 2.

    Concerns about stubbornly low inflation and deteriorating jobs growth caused two voting members of the Fed’s rate-setting committee — Fed Governors Lael Brainard and Daniel Tarullo — to warn against a premature rate increase during speeches earlier this week. While Brainard refused to speculate about timing, Tarullo said outright that he doesn’t expect the Fed to hike in 2015.

     

  • Dollar struggles in Asia after lift from US retail sales

    Dollar struggles in Asia after lift from US retail sales

    The dollar was steady on Friday after China’s central bank appeared to have stopped guiding the yuan lower for now, easing concerns that a weaker Chinese currency could derail plans by the US Federal Reserve to raise interest rates.

    The dollar traded at 124.40 yen, flat from late US levels and above this week’s low of 124.21 yen. For the week, it was up about 0.1 per cent.

    Volume in Tokyo was relatively thin, with many businesses winding down for the mid-August Obon holiday. Although there are no public holidays, many people take summer vacations around this time, and some offices close.

    “Company people have gone on their breaks and left their orders with banks,” said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

    Some commercial accounts would sell dollars above 125.50, he added.

    The euro fetched $1.1143, down slightly from late US levels. Still, it was up 1.6 per cent on the week, as the dollar has been hit by speculation that the US might not want a stronger dollar either if China pushes down the yuan.

    The euro got a lift this week as investors unwound euro-funded carry trades in the yuan and other emerging market currencies, which were hit hard by the devaluation.

    Emerging Asian currencies continued to fall on Friday, on track for steep weekly losses, with the Malaysian ringgit skidding to a fresh pre-peg 17-year low.

    On Friday, the People’s Bank of China set the yuan midpoint at 6.3990 yuan to the dollar, slightly stronger than Thursday’s levels.

    The central bank said on Thursday there was no reason for the yuan to fall further given the country’s strong economic fundamentals.

    Beijing’s moves some eased concerns that a cheaper yuan could trigger a “currency war”, or a competition among the world’s biggest economies to cheapen their own currencies to seek a competitive edge.

    US interest rate futures prices edged down and US bond yields bounced back as investors priced in an increased likelihood of a Fed rate hike in September. Solid US retail sales data also supported the case for an early rate hike.

    The dollar index, which tracks a basket of six major currencies, stood at 96.420 , off a one-month low of 95.926 hit on Tuesday.

    Still, market players are not sure how much more the dollar can gain, assuming the yuan could fall further in the face of a slowdown in the Chinese economy.

    “The latest concerns triggered by the sudden policy action may be subsiding a tad. But there is no change in the fact that the Chinese economy is slowing,” said Masafumi Yamamoto, senior strategist at Monex Securities.

    “I think the yuan has become overvalued as other countries tried to cheapen their currencies and it will keep falling, playing catch-up,” he added.

    While most major currencies saw limited moves on Friday, the New Zealand dollar fell after domestic retail sales had the slowest increase in two years, cementing expectations the Reserve Bank of New Zealand will cut rates.

    The New Zealand dollar traded down 0.5 per cent at $0.6535 , down about 1.3 per cent for the week.

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