The Critical Role of Networking Infrastructure in AI Innovation

Economic

Summary:

BNP Paribas Exane research explores the role of networking infrastructure in advancing AI innovation.

As artificial intelligence (AI) continues to innovate industries, the critical role of networking infrastructure in supporting AI development is often overlooked. While much attention has been given to advancements in compute power and storage, the importance of networking is becoming increasingly apparent, especially with the rise of Large Language Models (LLMs) and AI inferencing.

BNP Paribas Exane research sheds light on how networking is an underappreciated but crucial area of AI investment. As AI models grow in complexity, so does the demand for networking infrastructure capable of supporting them.

The evolving landscape of AI networking infrastructure

The scaling of AI models and inferencing workloads has led to a shift in procurement strategies, particularly for hyperscalers and large enterprises that now prioritise networking infrastructure. This shift is evident in the growing demand for AI-enabled back-end networks and traditional front-end networks. Supporting AI clusters that span thousands of compute nodes requires robust networking systems, and investors are beginning to take note.BNP Paribas Exane shows that the Total Addressable Market (TAM) for AI networking could encompass 25% of total AI spending on accelerators. Furthermore, data-center switch sales could nearly double, and sales of back-end switches could even quadruple over the next few years.

"As AI technology evolves, the importance of networking infrastructure continues to grow, presenting unique opportunities for business and investors alike. "—Karl Ackerman (Managing Director, Semiconductors & IT Hardware, BNP Paribas Exane)

The battle for AI networking supremacy: Ethernet vs. InfiniBand

At the heart of AI networking there are two prominent technologies: Ethernet and InfiniBand. InfiniBand has historically dominated AI networking due to its ability to meet the stringent demands of back-end AI networks. However, Ethernet is catching up fast. With its inherent flexibility, Ethernet users are closing the performance gap and potentially even surpassing InfiniBand in certain areas.

BNP Paribas Exane examines that the Ethernet ecosystem is maturing rapidly. The industry is preparing for smart NICs (Network Interface Cards) with flexible ordering capabilities that will support packet spraying—a key innovation aimed for release by the second half of 2025.

The future of AI networking infrastructure

As the technology matures, BNP Paribas Exane anticipates that Ethernet will capture an increasing share of the AI networking market. By 2027, BNP Paribas Exane projects Ethernet will command 46% of AI workload networking—a significant leap that underscores the growing importance of networking in the AI universe.

" As AI continues to push the boundaries of technological innovation, the demand for sophisticated networking solutions will likely intensify. "

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SAXO

Economic

Cryptocurrency

Bitcoin ETF options are making waves: here's what you need to know

Bitcoin has made its way from obscure internet forums to the boardrooms of Wall Street, but a new development might be its most significant step yet. The debut of options trading on Bitcoin ETFs, starting with BlackRock’s iShares Bitcoin Trust (IBIT), isn’t just another headline for crypto enthusiasts—it’s a game-changer for investors everywhere.

But what exactly are these Bitcoin ETF options? Why are they so important, and how could they impact both the crypto market and traditional finance? As these sophisticated financial tools gain traction, they might just reshape how we think about Bitcoin and its role in global markets.

What are bitcoin ETFs and options?

Bitcoin exchange-traded funds (ETFs), like IBIT, offer investors a way to gain exposure to Bitcoin through traditional financial markets without directly holding the cryptocurrency. Options, on the other hand, are contracts that give the holder the right (but not the obligation) to buy or sell an asset at a specific price within a set time frame. These tools, long staples in traditional finance, are now being introduced to Bitcoin ETFs, providing a regulated and accessible way to hedge, speculate, or manage risk in the crypto market.

Market on Edge: Bitcoin ETF Options are Making Waves: Here's What You Need to Know_1

Bitcoin's path to market maturity

The debut of Bitcoin ETF options introduces a new level of sophistication to the crypto market. These instruments bring advanced risk management tools into a sector defined by volatility and retail speculation. Institutional traders can now apply strategies like covered calls and synthetic longs, long established in traditional finance, to Bitcoin without needing direct exposure.

Options trading also fosters market depth, reducing volatility by creating “natural buyers and sellers” on both sides of the order book. This contrasts sharply with Bitcoin's historical behavior, where news events often caused wild price swings. With IBIT options, Bitcoin may enter a new phase of tempered volatility, appealing to more institutional investors.

Market on Edge: Bitcoin ETF Options are Making Waves: Here's What You Need to Know_2

Broader impacts on the cryptocurrency ecosystem

The introduction of IBIT options could ripple far beyond Bitcoin. As traditional financial tools integrate into crypto markets, they could bolster investor confidence, attract capital to altcoins, and deepen blockchain infrastructure.

Notably, other ETFs like Grayscale and Bitwise are preparing to launch options products, while Cboe Global Markets will introduce the first cash-settled Bitcoin index options on December 2, 2024. These options, based on the Cboe Bitcoin U.S. ETF Index, are designed to track spot Bitcoin ETFs listed on U.S. exchanges. Such initiatives reinforce the growing legitimacy of digital assets and their adoption in mainstream finance.

Comparing IBIT and gold ETFs

To understand the significance of IBIT’s growth, consider a comparison with BlackRock’s iShares Gold Trust (IAU), a long-established ETF providing exposure to gold:

Assets under management (AUM): IBIT manages $48.43 billion, surpassing IAU’s $34.01 billion. This reflects the rapid demand for cryptocurrency exposure.

Trading volume: IBIT averages 66 million daily trades, far outpacing IAU’s 4.23 million. The liquidity highlights Bitcoin’s growing appeal as a tradable asset.

Premium/discount to NAV: IBIT trades at a -0.05% discount, while IAU trades at a +0.40% premium. This suggests efficient pricing for IBIT relative to its NAV.

Maturity: Launched in January 2024, IBIT is a newcomer compared to IAU, which has been a portfolio staple since 2005.

While IAU remains a cornerstone for conservative investors seeking stability, IBIT is proving to be a strong player in the rapidly evolving digital asset space.

Navigating market sentiment and expectations

Early trading data for IBIT options reveals a heavily bullish sentiment, with nearly 289,000 call contracts traded compared to just 65,000 puts on the first day. Speculative activity has driven some bets to extreme levels, with traders purchasing calls that imply Bitcoin prices exceeding $170,000.

While these “moonshot” strikes grab attention, many options traders are pursuing balanced strategies like covered calls or synthetic longs to manage risks. These approaches make IBIT options versatile, catering to speculators and cautious institutions alike.

Conclusion: a transformative step for Bitcoin

The launch of options on the IBIT ETF is a pivotal moment, reshaping Bitcoin's financial landscape. By introducing tools to temper volatility, improve liquidity, and deepen market participation, Bitcoin is evolving from a speculative digital asset to an integral part of mainstream finance.

As more Bitcoin ETFs introduce options and innovative derivative products emerge, the cryptocurrency space will likely become more resilient and diverse. The hidden impacts of Bitcoin ETF options are just beginning to unfold, promising to redefine how investors engage with the crypto market.

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FastBull Featured

Daily News

[Quick Facts]

1. US Core PCE Index Rebounds

2. UK Service Sector Business Confidence Falls to Its Fastest Decline in Two Years Due to Increased Taxes in Budget

3. Trump's Team Considers Three Potential Solutions to Resolve the Russia-Ukraine Conflict

4. Canadian Minister of Labour Announces Failure to End Post Strike

[News Details]

US Core PCE Index Rebounds

Following Thanksgiving Day, US data hit a peak with the release of October PCE data, which showed a YoY increase of 2.3% (up from 2.1%) and a MoM increase of 0.2% (up from 0.2%). The Core PCE Index rose by 2.8% YoY (up from 2.7%) and 0.3% MoM (up from 0.3%).

The Core PCE Index is up for the first time since June, primarily due to rising service prices. Core service prices increased by 0.4% MoM in October, the largest increase since March. Core commodity costs remained stable.

Despite the PCE data matching market expectations, the market's reaction to the continuation of inflation is relatively limited. However, uncertainty looms as the US market will face "Black Friday" promotions after Thanksgiving Day, marking the start of the holiday season. This period will provide insight into the US consumer market.

Greater uncertainty will emerge in early January when Trump returns to the White House. His actions and statements have already affected financial markets and market expectations.

UK Service Sector Business Confidence Falls to Its Fastest Decline in Two Years Due to Increased Taxes in Budget

The CBI reported that optimism among consumer services businesses fell from -19 in August to -55 in November, the lowest since August 2022. Business and professional service sectors also experienced a decline in optimism, falling from 9 to -29.

The decline in UK service sector business confidence is the fastest in two years, partly due to increased taxes in Chancellor Rishi Sunak's October 30 government budget. Consumer services suffered the most, with large service sector employers expected to bear a £25 billion increase in wage tax. The CBI noted that business and professional service sector confidence also worsened.

Weakened confidence, reduced hiring intentions, and increased cost pressures reflect, at least partially, the impending increase in employer National Insurance rates.

Trump's Team Considers Three Potential Solutions to Resolve the Russia-Ukraine Conflict

Two sources familiar with the situation said that Trump's national security advisor, Mike Waltz, has been weighing several potential solutions to the Russia-Ukraine conflict. Although details of the strategy are still being formulated, Trump's officials may push for an early ceasefire to freeze the conflict during negotiations between the two sides.

According to Keith Kellogg, the special envoy for Ukraine and Russia, the first proposal involves continuing military aid to Ukraine on the condition that Kyiv engages in peace talks with Russia and proposes an "American policy of seeking a ceasefire and resolving the conflict through negotiation." At the same time, Ukraine's desire to join NATO will be "postponed" for a longer period to encourage Russia to participate in negotiations.

The second proposal is based on a proposal made by Rick Grenell, a former US ambassador to Germany, who previously expressed support for creating "autonomous zones" in Ukraine. However, he did not elaborate on what this would look like.

Another idea is to allow Russia to retain the territories it currently controls in exchange for Ukraine joining NATO. However, few people in Trump's circle seem willing to invite Ukraine to NATO in the short term.

Canadian Minister of Labour Announces Failure to End Postal Strike

Canadian Labour Minister Steven MacKinnon announced through social media that the disagreement between Canada Post and the union is too great to reach an agreement and end the strike. He also announced that special federal mediators had temporarily stopped mediation. MacKinnon explained that the suspension of mediation activities would allow both parties to re-evaluate their positions and return to the negotiating table with renewed determination.

MacKinnon has requested that both parties meet in his office. If both sides can "restart productive negotiations," special mediators will resume contact with both sides. Canada Post began a national strike on November 15, involving approximately 55,000 postal workers, causing a complete halt to Canada Post's operations.

[Focus of the Day]

UTC+8 18:00 Eurozone Economic Sentiment Index for November

UTC+8 21:00 Germany November CPI

US Thanksgiving Day, Market Closed

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ING

Economic

The average wage and salary in the Polish enterprise sector increased by 10.2% year-on-year in October (ING: 10.5%; consensus: 10.0%) following 10.3% YoY growth in September, reaching PLN 8,317 per month. The wage dynamics were supported by favourable calendar effects, while a high reference base in mining – where bonuses were paid in October 2023 – restrained growth.

In real terms (adjusted for inflation), wage growth in businesses slowed to 5.0% YoY from 5.2% YoY in September and nearly 10% YoY in the first quarter of 2024. Real wage growth has been systematically decreasing since the beginning of the year, and slowed down after the inflation rebound in July due to higher energy prices.

Household consumption growth was slower than the improvement in real disposable incomes in the first half of the year, indicating an increased propensity to save. In the second half, slower income growth was accompanied by a still-limited propensity to spend, and National Bank of Poland (NBP) surveys suggest that households are concerned about rising living costs in the future and are increasing their savings. This may be due to higher energy bills and negative experiences from 2023, when inflation significantly hit real incomes.

Wages growth moderates from its peak in 1Q24

Real wage and salary in enterprises, %YoY

Source: GUS, ING

Average employment in businesses decreased by 0.5% YoY last month (ING and consensus: -0.5%), the same rate as in September. Compared to September, the enterprise sector lost 4,000 jobs. Aside from July, all other months of this year have seen a month-on-month decline in the number of jobs.

In some sectors, there are ongoing group layoffs (e.g., automotive, household appliances) but generally, the economy is still struggling with labour shortages due to unfavourable demographic trends and a deterioration in net migrations. The StatOffice indicates that factors boosting wages include overtime payments, suggesting that the demand for labour remains high while the main barrier is limited supply.

Employment continues to decline slightly

Average paid employment in enterprise sector, %YoY

Source: GUS

The overall condition of Poland's labour market remains rather solid and unemployment is still near record-lows. The weakening of consumption seen in recent months is mainly due to behavioural factors (i.e., an increased propensity to save) rather than changes in household income situations.

We expect that consumption growth will be slower in 2025 than it was in 2024, and achieving economic growth in excess of 3% would require an investment rebound. This is indeed our baseline scenario as we see GDP growth of 3.5% in 2025. We anticipate that projects co-financed by structural funds and based on the EU's Recovery and Resilience Facility will commence.

To stay updated on all economic events of today, please check out our Economic calendar

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Brookings Institution

Economic

The fiscal outlook is bleak

Over the next 10 years, the Congressional Budget Office (CBO) projects federal debt—which currently stands at 99% of GDP—will rise to 122% of GDP, an all-time high. These 10-year figures will look worse if there is a recession, a war, or a tax cut. A sound fiscal path will require some combination of increases (not cuts) in taxes and reductions in spending growth.

Extending the temporary provisions of TCJA would be costly and regressive

Estimates based on CBO projections indicate that extending the expiring provisions in TCJA would cost over $5 trillion over the next 10 years in terms of lost revenue and added interest payments. The extension would also be highly regressive. A Tax Policy Center analysis shows that the top 1% would get nearly a quarter of the benefits, while the bottom 20% would receive less than 2%. If reductions in entitlement spending finance these tax cuts, the vast majority of low-income households will be worse off than if neither the tax cut extension nor the spending cuts were enacted.

Trump’s other tax cut proposals are costly

During the campaign, Trump embraced numerous additional tax cuts, including exemptions for income from tips, overtime work, and Social Security benefits, which together would cost an estimated $3.6 trillion over the next decade and would hasten the insolvency of the Social Security trust fund. He also proposed a full repeal of the cap on state and local tax deductions, which would cost another $1.2 trillion, plus tax breaks for car loan interest payments and military personnel, first responders, and Americans living abroad. He also proposed reducing the corporate income tax rate to 15%, which would cost at least $600 billion over the next decade. A tax cut for just domestic production would cost about half as much, but providing a targeted deduction would create room for gaming the system, as previous rules did in the past.

Tariffs create several problems

In addition to a broad 10 to 20% tariff on all imports, Trump has proposed 60% tariffs on all Chinese goods. Tariffs are estimated to generate $2.8 trillion over 10 years, accounting for their impact on the U.S. economy. But revenue will be lower in the nearly inevitable case that other countries retaliate.

Senate rules will limit tax policy choices

Republicans will have to use the budget “reconciliation” process to advance any bills that lack bipartisan support. Reconciliation imposes several restrictions. First, Republicans must enact a budget resolution, which determines how large a tax cut is possible. Second, a reconciliation bill cannot address Social Security and cannot increase deficits after 10 years. Therefore, any reconciliation tax bill (like the TCJA) must be temporary or be paired with a corresponding tax increase or a reduction in spending. These rules and some Republicans’ desire to limit deficit growth will create a search for so-called “pay-fors.”

Taken together, lawmakers could take tax policy in one of at least four directions:

Go big, permanently. Republicans might try to pass all the tax cut proposals on a permanent basis. This would cost approximately $10 trillion over the next decade (give or take a trillion). But that price might be too high, especially with required (and substantial) pay-fors after the tenth year.

Go big, temporarily. To keep the reported deficit increase low, Republicans could go for a wide range of tax cuts with expiration dates that can be extended later—exactly like the expiring provisions from TCJA. For example, a package that costs $10 trillion over 10 years would cost only about $2 trillion over two years. Coupled with $1 trillion of pay-fors, the package would have an official cost of just $1 trillion. This would be a bit of a budget gimmick, though, since the official budget score would not count the costs of extending those tax provisions.

Go small, permanently. Alternatively, they might enact some of the tax cuts, but on a longer-term basis. This would still require that the deficit not rise after the tenth year, so Republicans would have to include pay-fors.

Go for two tax cuts. Republicans might use reconciliation to enact the tax changes that lack Democratic support, after which policymakers could come together to pass a bipartisan bill with popular provisions like the Child Tax Credit.

No matter what path Republicans take, it will be a consequential year for tax policy. Buckle up.

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Glendon

Economic

Divergence trading is a powerful technical analysis strategy that helps traders predict potential price reversals in the market. By identifying and trading bullish and bearish divergences, traders can spot opportunities where the price of an asset is moving in the opposite direction of an underlying momentum indicator, such as the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), or Stochastic Oscillator.

This article will explain the concept of bullish and bearish divergences, how to spot them, and strategies for trading these signals.

What is Divergence in Trading?

Divergence occurs when the price of an asset moves in the opposite direction to an indicator that tracks momentum or volume. Traders use divergence to identify potential trend reversals or continuation signals, as the discrepancy between price action and the indicator suggests that the current trend may be weakening.

There are two main types of divergence:

Bullish Divergence: This occurs when the price forms a lower low, but the momentum indicator forms a higher low. It signals that the selling pressure is weakening, and a potential reversal to the upside may be on the horizon.

Bearish Divergence: This happens when the price forms a higher high, but the momentum indicator forms a lower high. It suggests that buying pressure is fading, and a price reversal to the downside may be imminent.

How to Identify Bullish Divergence

Bullish divergence is typically found during a downtrend and is seen as a signal that the trend may soon reverse to the upside. It is a sign that the bears (sellers) are losing strength and the bulls (buyers) could be gaining control.

Steps to Identify Bullish Divergence:

Price Action: Look for a lower low in the price chart. This suggests that the downward movement is continuing.

Momentum Indicator: Check the momentum indicator (RSI, MACD, etc.). Look for a higher low in the indicator. Even though the price is making a new low, the momentum indicator is showing less bearish strength.

Confirmation: Once you spot the bullish divergence, wait for confirmation. A price move above a recent resistance level or a bullish candlestick pattern can provide additional confirmation that a reversal may be occurring.

Example of Bullish Divergence in Action:

Imagine a stock that has been in a downtrend, and the price falls to a new low. However, when you check the RSI (or any other momentum indicator), it has only reached a higher low, indicating that downward momentum is weakening. This divergence suggests that the selling pressure is losing strength, and the price may soon start to move upward.

How to Identify Bearish Divergence

Bearish divergence is typically observed during an uptrend and can signal that the price may reverse to the downside. It indicates that the buying pressure is weakening, and sellers may soon take control of the market.

Steps to Identify Bearish Divergence:

Price Action: Look for a higher high in the price chart. This suggests that the upward trend is continuing.

Momentum Indicator: Check the momentum indicator for a lower high. Even though the price is making a new high, the momentum indicator is showing less bullish strength.

Confirmation: After identifying bearish divergence, wait for additional confirmation such as a breakdown below a recent support level or a bearish candlestick pattern (like a shooting star or engulfing pattern) to confirm the reversal.

Example of Bearish Divergence in Action:

Consider a stock in an uptrend where the price reaches a new high. However, when you look at the RSI, you see that it has formed a lower high, signaling a weakening of buying momentum. This suggests that the uptrend may soon reverse, and a downward price move could be coming.

Strategies for Trading Divergences

Trading bullish and bearish divergences can be highly effective if used correctly. Here are some strategies to maximize the potential of divergence signals:

Wait for Confirmation: While divergence is a strong indication of a potential trend reversal, it’s essential to wait for confirmation. This could include a break of a key support or resistance level, a candlestick pattern, or a trendline break.

Use Stop-Loss Orders: As with any trading strategy, managing risk is crucial. If trading bullish or bearish divergence, always set a stop-loss order to protect your capital in case the market doesn’t behave as expected.

Combine Divergence with Other Indicators: To increase the accuracy of your trades, combine divergence signals with other technical analysis tools like trendlines, moving averages, or Fibonacci retracement levels. This multi-layered approach helps to filter out false signals.

Trading with the Trend: Some traders prefer to trade divergences in the direction of the primary trend. For example, in a strong uptrend, they may look for bearish divergences as potential signals for profit-taking or trend exhaustion, while in a downtrend, they may focus on bullish divergences as possible entry points for a reversal.

The Role of Timeframes in Divergence Trading

Divergence can appear on any timeframe, from minutes to months, but the significance of the divergence signal often increases with the timeframe. A divergence on a daily or weekly chart is generally more reliable than one on a 5-minute chart because it represents a broader market sentiment.

Traders should always consider the timeframe they are using when evaluating divergence signals. Short-term traders might use smaller timeframes (e.g., 1-hour or 4-hour charts), while long-term traders might focus on daily or weekly charts.

Common Mistakes to Avoid When Trading Divergences

Ignoring Market Context: Divergence signals can be misleading in strong trending markets. In some cases, the divergence may just be a short-term pullback in an ongoing trend rather than a sign of an imminent reversal. Always consider the broader market context.

Trading Divergence Too Early: Traders often jump into trades at the first sign of divergence, only to see the price continue in the direction of the trend for a while before reversing. Patience is crucial, and waiting for additional confirmation is essential.

Over-Reliance on Divergence: While divergence is a powerful tool, it should not be relied upon as the sole basis for a trade. Use other indicators and technical analysis tools to improve your chances of success.

Conclusion

Trading bullish and bearish divergences is an effective method for identifying potential trend reversals in the market. By learning how to spot these divergences and using them in combination with other technical analysis tools, traders can improve their ability to anticipate price movements and make more informed trading decisions. Remember to practice patience, confirm divergence signals, and always manage risk when incorporating these strategies into your trading plan.

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Glendon

Economic

When traveling to Vietnam or doing business in the country, one of the first things you'll need to consider is how to exchange your foreign currency to the Vietnamese Dong (VND). Vietnam is a predominantly cash-based economy, and while credit cards are accepted in some larger cities, cash is still king in most transactions. Understanding the pros and cons of exchanging foreign currency to Vietnamese Dong can help you make informed decisions, avoid costly mistakes, and ensure a smoother experience when managing money in the country.

The Pros of Exchanging Foreign Currency to Vietnamese Dong

1. Convenient for Daily Transactions

In Vietnam, almost all transactions, from purchasing local goods at markets to dining in restaurants or paying for public transport, require the use of Vietnamese Dong. While some hotels, airlines, and large businesses accept U.S. dollars (USD), it's still much easier to use the local currency in day-to-day interactions. Having Dong on hand allows you to avoid issues with change, as smaller shops often cannot process foreign currencies.

2. Avoiding Exchange Rate Fluctuations

Exchanging your foreign currency to Vietnamese Dong allows you to lock in an exchange rate before embarking on your trip. Vietnam's currency can experience volatility, so exchanging money in advance can help you avoid unfavorable fluctuations in exchange rates. By exchanging currency at a favorable rate, you can ensure you are getting a better deal than if you waited until the last minute or relied on ATMs.

3. Better Rates at Local Exchange Services

Vietnam offers various exchange services, from banks to currency exchange booths, where you can convert foreign currency to Dong. These services often offer better rates than international airports or hotels, where exchange rates tend to be higher and fees more pronounced. Many local banks or exchange services offer competitive rates, especially for major currencies like the U.S. Dollar, Euro, or British Pound.

4. Control Over Your Money

By exchanging your foreign currency for Vietnamese Dong, you avoid unnecessary fees associated with credit cards or foreign transactions. Using local currency can also help you control your spending better, as you're less likely to overspend when you physically handle cash. It can also save you from ATM withdrawal fees, which may apply when using international cards.

The Cons of Exchanging Foreign Currency to Vietnamese Dong

1. Exchange Rate and Fees

The most significant downside of exchanging foreign currency to Vietnamese Dong is the exchange rate and the associated fees. While you may find good rates in some locations, others, such as airports, currency exchange counters, or hotels, often offer lower rates and higher service fees. This means you may end up losing out on a considerable amount when exchanging money in less favorable settings.

Additionally, there are often hidden fees in exchange transactions, such as commissions charged by currency exchange services or service charges at banks. These additional costs can add up quickly and make the exchange process more expensive than it initially seems.

2. Carrying Large Amounts of Cash

When exchanging foreign currency for Vietnamese Dong, you're likely to receive large amounts of cash due to the relatively low value of the Vietnamese Dong. This can be cumbersome, particularly when you're traveling with limited storage space or need to carry the cash for extended periods. Carrying large sums of cash also comes with the risk of theft or loss, which can be a concern, especially in crowded areas or during long travels.

3. Difficulties with Currency Conversion in Remote Areas

In large cities like Hanoi or Ho Chi Minh City, finding currency exchange services is relatively easy. However, in rural areas or less-developed regions of Vietnam, the availability of foreign exchange services may be limited. In such cases, you might find it challenging to convert foreign currency into Vietnamese Dong, which can leave you in a difficult situation if you're not prepared.

4. Exchange Rate Variability

While exchanging foreign currency in advance might seem like a good strategy, you also have to consider the potential for exchange rate fluctuations over time. The Vietnamese Dong can experience periods of depreciation or appreciation against foreign currencies, meaning the rate you locked in initially may not be as favorable when you actually use it. You could end up losing money on the conversion, particularly if the exchange rate moves in the opposite direction after you’ve exchanged your funds.

Factors to Consider When Exchanging Currency

Before exchanging foreign currency to Vietnamese Dong, there are several important factors to consider:

Check Current Exchange Rates: Stay informed about the latest exchange rates by consulting reputable sources or financial websites. This will help you get an idea of the going rate and avoid unfavorable deals.

Use Trusted Currency Exchange Services: Stick to reputable banks or official exchange booths to avoid scams or poor rates. Be cautious of street vendors offering "too good to be true" rates, as they may be engaging in fraudulent practices.

Avoid Airport Currency Exchanges: Airport exchange booths often offer the worst rates due to their captive customer base. If possible, try to exchange currency at a local bank or exchange office after you’ve arrived in Vietnam.

Consider Using ATMs: ATMs can be a convenient way to withdraw Vietnamese Dong directly from your bank account. However, be aware of any foreign transaction fees or withdrawal limits that may apply.

Conclusion

Exchanging foreign currency to Vietnamese Dong can offer several advantages, such as convenience, better rates, and control over your spending. However, it also comes with some notable drawbacks, including unfavorable exchange rates, high fees, and the challenge of handling large amounts of cash. To make the most of your currency exchange experience in Vietnam, it’s important to carefully research rates, choose reputable services, and stay mindful of potential hidden fees. By understanding both the pros and cons of currency exchange, you can ensure that your financial dealings in Vietnam are smooth and cost-effective.

To stay updated on all economic events of today, please check out our Economic calendar

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The Critical Role of Networking Infrastructure in AI Innovation

The evolving landscape of AI networking infrastructure

The battle for AI networking supremacy: Ethernet vs. InfiniBand

The future of AI networking infrastructure

Market on Edge: Bitcoin ETF Options are Making Waves: Here's What You Need to Know

Bitcoin ETF options are making waves: here's what you need to know

What are bitcoin ETFs and options?

Bitcoin's path to market maturity

Broader impacts on the cryptocurrency ecosystem

Comparing IBIT and gold ETFs

Navigating market sentiment and expectations

Conclusion: a transformative step for Bitcoin

November 28th Financial News

[Quick Facts]

[News Details]

[Focus of the Day]

Polish Wage Growth Continues Easing As Labour Market Remains Tight

Wages growth moderates from its peak in 1Q24

Real wage and salary in enterprises, %YoY

Source: GUS, ING

Employment continues to decline slightly

Average paid employment in enterprise sector, %YoY

Source: GUS

Framing the Upcoming Tax Debate: 5 Issues, 4 Paths

The fiscal outlook is bleak

Extending the temporary provisions of TCJA would be costly and regressive

Trump’s other tax cut proposals are costly

Tariffs create several problems

Senate rules will limit tax policy choices

How to Identify and Trade Bullish and Bearish Divergences

What is Divergence in Trading?

There are two main types of divergence:

How to Identify Bullish Divergence

Steps to Identify Bullish Divergence:

Example of Bullish Divergence in Action:

How to Identify Bearish Divergence

Steps to Identify Bearish Divergence:

Example of Bearish Divergence in Action:

Strategies for Trading Divergences

The Role of Timeframes in Divergence Trading

Common Mistakes to Avoid When Trading Divergences

Conclusion

Understanding the Pros and Cons of Converting Foreign Currency to Vietnamese Dong

The Pros of Exchanging Foreign Currency to Vietnamese Dong

1. Convenient for Daily Transactions

2. Avoiding Exchange Rate Fluctuations

3. Better Rates at Local Exchange Services

4. Control Over Your Money

The Cons of Exchanging Foreign Currency to Vietnamese Dong

1. Exchange Rate and Fees

2. Carrying Large Amounts of Cash

3. Difficulties with Currency Conversion in Remote Areas

4. Exchange Rate Variability

Factors to Consider When Exchanging Currency

Conclusion

Risk Disclosure