USDVND moves sideways ahead of the FOMC

This week, USDVND was little changed while the dollar index fell sharply as the FOMC meeting approached. Specifically, concerns about the U.S. labor market outweighed sticky inflation: job openings declined, initial jobless claims rose, and the unemployment rate ticked higher, reinforcing expectations for a rate cut next week. A 25bps cut is now viewed as nearly certain, and a minority even contemplate a half percent move, which the Fed employed when it began its pivot last September. Looking ahead to Chair Powell’s interest rate decision, risks are building because the market is largely positioned for a single outcome, so any deviation could jolt financial markets next week and caution is warranted.