Vietnam Dong: Inflation and trade headwinds build – Commerzbank
Commerzbank highlights that Vietnam’s May Consumer Price Index (CPI) rose to 5.6% year-on-year, the highest since January 2020, driven by food and energy costs, while the trade deficit widened to a record USD 5.2 billion on strong import growth. Despite these supply-side pressures, USD/VND remains relatively anchored by a stable State Bank of Vietnam (SBV) fixing, with the Dong down only 0.3% versus the Dollar year-to-date.
Higher CPI and record trade deficit
"May inflation came in slightly below expectation at 5.6% yoy (Bloomberg consensus: 5.8%) vs 5.5% in April, marking the highest reading since January 2020. CPI averaged 4.3% in the first five months of the year, slightly below the State Bank of Vietnam’s (SBV) 4.5% target."
"Elevated food and energy prices drove the increase as these items faced supply disruptions linked to Middle East tensions. Core CPI, which excludes volatile and administered prices, was steady at 4.7%, unchanged from April."
"In FX, USD/VND rose 0.1% to 26,344 yesterday. The pair remains anchored by a stable SBV fixing rate in the past month. Nonetheless, the pair is still 1.1% higher than its pre-conflict level. Year-to-date, the VND is down 0.3% vs the USD."
"Overall, the economy faces growing supply-side headwinds as inflation quickens. On a bright note, inflationary pressures remain primarily driven by higher energy prices, and signs of second-order effects have not emerged yet."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Is a new wave of sell-offs approaching? The ultimate rival of the AI bull market emerges—The "global anchor of asset pricing" breaks through the 5% super threshold
After the 10-year US Treasury yield breaks back above the critical 5% mark, it is more likely to usher in a period of high-level tug-of-war and accelerated asset differentiation. Especially before energy shocks and the significantly eased large-scale expansion of the US fiscal deficit, the conditions to quickly replicate the sharp yield decline seen at the end of 2023 are not yet fully in place.
Anthropic releases another article: What will the economy look like in the AI era?
Anthropic's economics team has released an AI economic scenario model, centered around three scenarios: moderate and gradual growth, transformative changes with GDP doubling, and an extreme situation with 15% annual growth but massive job losses among knowledge workers. The model treats work as "bundles of tasks" and analyzes AI’s enhancement and substitution effects on different types of tasks. Anthropic emphasizes that the economic outlook for 2030 is not predetermined; the key lies in how the dividends from AI are widely shared.
"New Federal Reserve News Agency": Waller's Rate Hike "Has No Way Back", Trump's "Trust" Faces Test
Nick Timiraos believes that after the higher-than-expected August CPI, the probability of the Federal Reserve raising interest rates this week has surged, while Waller’s hawkish stance on inflation has left himself almost "no leeway." With seven weeks before the election, whether or not Waller raises rates will directly test how long Trump's “trust” in him can last. Previously, Waller maintained a balance between the White House and the Federal Reserve by “talking less and avoiding provocation,” but after this meeting, silence will no longer serve as his shield.
Trump Opposes AI "Guardrails": Congress Pushes Legislation for Restrictions, Deepening Bipartisan Divide
U.S. President Trump opposes setting guardrails for artificial intelligence (AI), putting him at odds with a growing number of bipartisan lawmakers. As the midterm elections approach, voters' concerns about AI safety have intensified their doubts about this technology.
Crypto prices
More
