Vietnamese Dong Weakens Against US Dollar Amid Inflation Fears and Global Uncertainty

The Vietnamese dong weakened against the U.S. dollar Friday morning, trading at a three-week high against major peers. Vietcombank sold the greenback at VND26,510, a 0.04% gain from Thursday. On the black market, the currency slid 0.08% to around VND26,360. The State Bank of Vietnam hiked its reference rate by 0.04% to VND25,283. Globally, the dollar rode U.S. Treasury yields higher on Friday and hovered near a 40-year peak against the yen, as a spike in oil prices and a renewed global trade war raised the stakes for inflation, Reuters reported. Its resurgence came as oil prices climbed back above $100 a barrel for the first time since May after Yemen's Houthis struck two Saudi oil tankers in the Red Sea, extending the Middle East war to a second major shipping chokepoint. The greenback held near a three-week top against a basket of currencies at 101.45 after a 0.3% rise overnight. The yen remained pinned near a 40-year low at 163.86 per dollar. Sterling languished around a three-week low and bought $1.3313 in early Asia trade, after sliding nearly 0.5% overnight against a resurgent dollar. The euro was similarly nursing losses and wobbled at $1.1376. The New Zealand dollar edged 0.08% higher to $0.5776, after sliding 0.8% in the previous session. In Vietnam's single-party system, economic growth is prioritized, but controlling inflation and maintaining currency stability are crucial challenges. Global supply chain disruptions and geopolitical tensions pose risks to Vietnam's export-driven economy. While economically dependent on China, Vietnam pursues a foreign policy balancing geopolitical considerations.