The State Bank of Vietnam (SBV) set the daily reference exchange at 25,228 VND/USD on August 8, down 11 VND from the previous day. With the current trading band of /- 5%, the ceiling rate applicable for commercial banks during the day is 26,489 VND/USD and the floor rate 23,967 VND/USD.

The DXY made a comeback

Kicking off June at 96.8, the DXY maintained a fairly steady upward trend throughout the month and ended July strongly at a 2-month peak of 99.9—marking a 3.2% monthly gain in July, its first rise this year. On August 11, 2025, DXY is fixed at 98.1. This development occurred against the following backdrop: Firstly, de-escalating trade tensions helped reduce risks to economic growth. Specifically, as of July, 11 economies had reached tariff agreements with the U.S., including the UK, China, Vietnam, the Philippines, Indonesia, Japan, the EU, South Korea, Cambodia, Thailand, and Pakistan. Other countries will face tariffs ranging from 10% to 41% starting August 1.

Additionally, all goods identified as transshipped to avoid tariffs will incur an extra 40% tariff. Secondly, the U.S. dollar was also supported by solid economic data, with Q2 GDP growth reaching 3%; however, inflationary pressures persisted, with the June PCE index rising 2.6% yoy. Consequently, this led the Federal Reserve to maintain interest rates unchanged for the seventh consecutive meeting.

USD/VND in uptrend

The upward trend of the interbank exchange rate slowed, with a modest increase of 0.3% in July. This was partly supported by the narrowing VND-USD interest rate differential, amid the overnight interbank interest rate consistently anchoring above 4% throughout July. Additionally, the VND was bolstered by robust export activities, yielding a positive trade surplus. According to the Ministry of Industry and Trade, export turnover in July was estimated at USD 41.6 billion, with a trade surplus of USD 1.7 billion. Furthermore, the State Treasury ceased purchasing USD from commercial banks. Altogether, this helped to alleviate pressure on USD supply.

However, external pressures still weighed on the exchange rate as the DXY index recovered 3.2% from a three-year low recorded at the end of June. Consequently, the interbank exchange rate ended the month at 26,198 VND/USD (2.9% ytd), while the free-market rate hovered at 26,445 VND/USD (2.7% ytd). Meanwhile, the central exchange rate was significantly adjusted upward to 25,240 VND/USD, up 3.7% ytd.

Although the USD is expected to continue declining toward the end of this year as the Fed is projected to start cutting interest rates, MBS believes intrinsic pressures will be a key factor contributing to the surge in exchange rates.

First, a persistent USD-VND interest rate differential will still exist despite the FED cutting rates to 4%.

Second, import demand is higher due to 0% tariffs on U.S. goods. Conversely, exports will slow down in 2H25, leading to a narrower trade surplus in 2025.

Third, FDI inflows are slower as investors await clearer US tariff information. 

Fourth, the domestic-global gold price gap is big amid rising gold prices. Hence, MBS expects the USD/VND rate to fluctuate in the range of 26,600 – 26,750 VND/USD by year-end, representing a year-to-date increase of 4.5% - 5%.