Exchange rates are under pressure from the US-China trade war and the Fed’s rate hikes. – Photo dautucophieu.net Viet Nam News HÀ NỘI – The Vietnamese economy is walking a careful tightrope amid rapid developments around the world, especially the spiraling US-China trade war and the US Federal Reserve’s rate hikes, which are weighing on exchange rates and Việt Nam’s trade balance. Reuters reported that China’s yuan was flat at 6.9673 per dollar on Wednesday after tumbling to a decade low on Tuesday. The yuan was driven down by worries about a slowdown of the world’s second-largest economy and a potential escalation in the US-China trade war. The Chinese currency was on track for a loss of 1.4 per cent in October, its seventh straight monthly loss – the longest such losing streak on record. Statistics showed that China’s yuan lost 6 per cent against the US dollar from the beginning of this year and 9 per cent within the past six months. A UBS analyst forecast that the Chinese currency could weaken further to hit 7.3 yuan per dollar by the end of 2019. Data of the State Bank of Việt Nam showed that at the beginning of the year, the VNĐ/CNY cross rate was quoted at 3.444,86 and is now at 3.280,76, meaning that the Vietnameseđồngappreciated by nearly 5 per cent against China’s yuan. According to Ngô Đăng Khoa from HSBC Việt Nam, the Fed’s tightened monetary policies together with weaker Chinese yuan would be major challenges for… [Read full story]
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