Vietnam Central Bank Raises Reference Exchange Rate to 25,058 VND/USD Despite USD Weakness Globally

Economic

Forex

Summary:

On June 24, the State Bank of Vietnam (SBV) raised the central reference exchange rate sharply to 25,058 VND/USD, up 30 VND from the previous day..

Domestic Exchange Rate Trend: Short-Term Upward Pressure on VND

The SBV’s decision to raise the central reference rate to 25,058 VND/USD signals heightened demand for USD or a need to manage currency volatility. At the same time, commercial banks like Vietcombank, BIDV, Techcombank, and ACB adjusted their exchange rates. Vietcombank increased both buying and selling rates by 31 VND, quoting at 26,000 - 26,310 VND/USD. BIDV reduced its buying rate by 65 VND but increased the selling rate by 31 VND, a sign of diverging strategies amid market uncertainties. Meanwhile, free-market rates remained high, hovering around 26,290 - 26,390 VND/USD.

The international decline in the USD comes after President Trump announced a “complete and total” ceasefire between Iran and Israel, reducing geopolitical risks and weakening demand for the greenback as a safe-haven asset. The USD Index fell to 98.26, and global oil prices dropped about 4% as fears of disruption through the Strait of Hormuz faded. Despite this, the domestic exchange rate in Vietnam climbed, partly due to delayed reaction and anticipation of higher import demands, especially for fuel.

Short-Term Pressure May Persist Despite Global USD Drop

While the global USD is under pressure, Vietnam’s exchange rate is still being driven by domestic factors. These include seasonal import needs, elevated fuel prices, and cautious adjustments by the SBV to ensure currency stability. Unless the international oil price drops further and Fed signals clearer rate cuts, short-term upward pressure on the VND may persist. However, if Middle East tensions continue to ease and US monetary policy becomes more dovish, the exchange rate may stabilize or move downward over the medium term.

The SBV’s decision to raise the central rate to 25,058 VND/USD despite a weaker USD globally reflects Vietnam’s internal currency dynamics, including rising import costs and cautious central bank strategy. While geopolitical risks have eased and the USD has declined globally, domestic exchange rate pressure remains due to market demand and the need to manage macroeconomic stability.

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Economic

Market Relief Reflects Rapid De-escalation

President Trump’s declaration of a “complete and total” ceasefire between Israel and Iran triggered a swift market reaction, signaling investor optimism that the 12-day conflict may have concluded without drawing the U.S. into deeper military engagement. The ceasefire announcement, confirmed by Iranian and Qatari officials and reportedly accepted by Israel, was met with immediate gains in equity futures, a pullback in crude oil, and a broad-based decline in the U.S. dollar.

WTI crude futures fell over 4% after markets reopened, trading near $66 per barrel, while S&P 500 e-mini futures rose, reflecting a renewed appetite for risk assets. The dollar, which had strengthened amid safe-haven flows during the peak of tensions, gave up ground as traders reassessed the likelihood of further escalation.

Currency Strategists Point to Waning Safe-Haven Flows

Hirofumi Suzuki, Chief FX Strategist at SMBC, noted that the USD/JPY exchange rate was retracing toward pre-conflict levels, with safe-haven demand for the dollar easing now that the immediate threat of military escalation appears to have subsided. He added that continued yen appreciation may follow if both sides adhere to the ceasefire terms.

Ray Attrill of National Australia Bank highlighted the symbolic nature of Iran’s strike on a U.S. base in Qatar, suggesting it was choreographed for domestic audiences rather than military impact. This “performative” retaliation effectively removed the threat of a renewed oil spike, thereby reducing downside risks to global growth and encouraging a modest uptrend in procyclical currencies like the Australian and New Zealand dollars.

Fed Outlook and Oil Retreat Amplify Dollar Weakness

The dollar’s softness was further compounded by dovish remarks from Federal Reserve officials Michelle Bowman and Christopher Waller, both suggesting rate cuts may be warranted soon. As geopolitical tensions faded, traders turned their focus back to monetary policy. The CME FedWatch tool showed that the probability of a July rate cut rose from 14.5% to 20% within a day.

Tony Sycamore of IG emphasized that with oil prices falling and Fed divisions deepening, expectations for a rate cut are climbing. He suggested the dollar’s broader downtrend may resume, particularly if Fed Chair Jerome Powell signals flexibility during his upcoming congressional testimony.

Equity Markets Eye Momentum Shift

Equity strategists also welcomed the de-escalation. Robert Pavlik of Dakota Wealth suggested the ceasefire could mark a turning point, as it resolves several key investor anxieties: the risk of wider war, threats to U.S. troops, and fears of a nuclear-armed Iran. If the truce holds, Pavlik believes markets could experience a more sustained positive reaction.

Art Hogan of B. Riley Wealth warned, however, that “talk is cheap” and emphasized the importance of confirmation and follow-through. Still, market sentiment leaned optimistic as Monday’s late trading gains suggested confidence that a broader conflict had been avoided.

Jack Ablin of Cresset Wealth Advisors took a more cautious view, stating that while the ceasefire reduces uncertainty, equity markets had already been resilient throughout the crisis. He framed the news as an incremental positive rather than a bullish catalyst.

Oil and Risk Sentiment at the Forefront

Jake Dollarhide of Longbow Asset Management captured the prevailing investor mood: high oil prices and geopolitical instability had been the twin brakes on market performance. With the ceasefire easing both concerns, investors may now shift their focus back to fundamentals — inflation, rates, and earnings — with reduced volatility from the Middle East.

Trump’s announcement of a ceasefire between Israel and Iran has temporarily lifted the fog of geopolitical risk that weighed on global markets. The response has been decisive: oil has retreated, equities have rallied, and the dollar has weakened. Yet the underlying tone from investors remains cautious. While the ceasefire may calm immediate fears, its durability and the unresolved issue of Iran’s nuclear capabilities could reintroduce volatility. For now, however, the truce provides markets with much-needed breathing room — and a tentative return to risk-on sentiment.

Source: Reuters

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Forex

Middle East Situation

Ceasefire News Reverses Safe-Haven Flows

The U.S. dollar, which had gained ground in recent weeks as geopolitical tensions rose, fell broadly on Tuesday following President Trump’s announcement of a “complete and total” ceasefire between Israel and Iran. The news, confirmed by Iranian and Qatari officials and echoed by Israeli media, prompted investors to unwind safe-haven positions and rotate into riskier assets, including equities and high-beta currencies like the Australian and New Zealand dollars.

The Australian dollar rose 0.35% to $0.6483, and the New Zealand dollar climbed 0.37% to $0.5998. These gains reflect the currencies’ typical sensitivity to global risk sentiment, trade conditions, and commodity flows. Meanwhile, the euro and British pound also strengthened modestly against the greenback, up 0.21% and 0.18% respectively.

The yen, another traditional safe haven, also gained against the dollar, rising 0.21% to 145.79, highlighting a global pivot away from defensive positioning as the ceasefire diminished fears of regional war escalation and potential oil supply disruptions.

Strategic Repricing: Geopolitical Risk Premium Deflates

The dollar’s recent strength had been bolstered by safe-haven demand as tensions in the Middle East escalated. However, the apparent de-escalation following Trump’s direct negotiations with both Iranian and Israeli leadership prompted traders to quickly reprice the geopolitical risk premium embedded in the greenback. The market’s causal response was immediate: conflict risk fell, investor confidence rose, and demand for risk-free dollar assets softened.

Rodrigo Catril of National Australia Bank noted the rally in risk assets was grounded in optimism, though tempered by the need for clarity on the terms and durability of the ceasefire. Still, the market reaction suggests that investors are treating the agreement as credible enough to warrant a shift back into higher-yielding and growth-linked positions.

Fed Outlook Adds to Downward Dollar Pressure

Adding to the dollar’s softness were dovish remarks from Federal Reserve Governor Michelle Bowman, who echoed recent sentiments from Fed Governor Christopher Waller, both suggesting openness to a rate cut as soon as the July meeting. This rhetorical shift within the Fed adds a monetary policy dimension to the dollar’s decline.

Market-implied probabilities for a July rate cut rose from 14.5% to 20% following Bowman’s comments, according to the CME FedWatch tool. Tony Sycamore of IG noted that the market may be underpricing the likelihood of a July cut, especially amid division within the Fed board and growing downside risks to growth.

Investors now await Fed Chair Jerome Powell’s congressional testimony on Tuesday and Wednesday for further insight into the central bank’s evolving rate outlook, especially in light of receding geopolitical tensions and the still-fragile inflation backdrop.

Dollar Retreat Marks a Return to Risk

The dollar’s broad decline reflects a market swiftly shifting out of defensive positioning as the threat of regional war between Israel and Iran appears to recede. Combined with softening Fed rhetoric and increasing expectations of rate cuts, the greenback faces headwinds from both global and domestic fronts.

Should the ceasefire prove durable and Fed officials continue to signal flexibility on monetary easing, the risk rally may gain momentum, putting further downward pressure on the dollar. However, any breakdown in the truce or stronger-than-expected U.S. inflation data could quickly reverse the current trend. For now, the market narrative is one of cautious optimism, with geopolitics momentarily sidelined in favor of growth-focused positioning.

Source: Reuters

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Daily News

[Quick Facts]

♦ Trump: Israel and Iran have fully agreed to a comprehensive ceasefire.

♦ Iranian FM denies Ceasefire Deal but signals willingness to halt operations.

♦ Fed Officials shift stance to support July rate cut.

[News Details]

Trump: Israel and Iran have fully agreed to a comprehensive ceasefire

On June 23rd local time, U.S. President Donald Trump posted on his social media platform Truth Social, stating that Israel and Iran have fully agreed to a comprehensive ceasefire, triggering renewed sell-offs in crude oil and gold.

According to informed sources, the ceasefire agreement was mediated by Qatar and the United States. After Iran retaliated against a U.S. airbase in Qatar, it conveyed a message to the White House via Qatar, indicating no further attacks would be launched. The White House also responded, emphasizing it would not retaliate against Iran's strikes and expressing readiness to resume negotiations with Tehran. Subsequently, the U.S., Israel, Qatar, and Iran continued talks to finalize ceasefire terms and a timeline for implementation.

Iranian FM denies Ceasefire Deal but signals willingness to halt operations

Iranian Foreign Minister Araqchi posted on platform X, stating that as Iran has repeatedly clarified, it was Israel that initiated this war against Iran, not the other way around. "As of now, there is NO "agreement" on any ceasefire or cessation of military operations. The military operations of our powerful Armed Forces to punish Israel for its aggression continued until the very last minute, at 4 am." Araqchi added: "The final decision on the cessation of our military operations will be made later,"

Fed Officials shift stance to support July rate cut

Recently, Trump escalated his long-standing public criticism of the Federal Reserve, pressuring the central bank as it navigates inflation risks from tariff policies and economic slowdown. Amid presidential pressure, policy divisions within the Fed have surfaced.

On Monday local time, Chicago Fed President Austan Goolsbee noted that Trump's tariff policies have so far had a milder impact on the economy than expected, and the lack of significant inflationary pressure could allow the Fed to resume rate cuts. Earlier that day, newly appointed Fed Vice Chair for Supervision Michelle Bowman also stated that if inflationary pressures remain contained, she supports lowering policy rates as early as the next meeting to move closer to neutral levels while maintaining a healthy labor market. Additionally, Fed Governor Waller said last Friday that he expects tariffs will not significantly boost inflation, suggesting policymakers should consider cutting rates as soon as July.

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Gerik

Commodity

Ceasefire Removes Immediate Threat to Global Oil Supply

Oil markets reacted swiftly and sharply to President Trump’s announcement on Monday evening of a “complete and total” ceasefire between Israel and Iran. West Texas Intermediate (WTI) crude fell over 4% to around $66 per barrel, while Brent crude dropped to near $68, reversing gains accumulated during nearly two weeks of escalating conflict. The ceasefire, if sustained, effectively removes one of the most significant short-term threats to global oil supply — the risk of military action disrupting the Strait of Hormuz, the world’s most critical energy chokepoint.

Markets had been pricing in the possibility of a severe escalation following the U.S. and Israeli strikes on Iranian nuclear facilities and Iran’s symbolic retaliation via missile attacks on a U.S. base in Qatar. However, Trump’s public remarks — including praise for Iran’s restraint and acknowledgment of early warnings that helped avoid casualties — helped calm fears of further military confrontation.

Symbolic Retaliation Weakens Oil’s Risk Premium

The market's reaction underscores a shift in perception: Iran’s missile strike on the Al Udeid base is now seen as a calibrated gesture rather than the beginning of a broader offensive. Rebecca Babin of CIBC Private Wealth noted that the response “avoided any loss of life or damage to energy infrastructure,” reinforcing the view that the move was symbolic and intentionally de-escalatory.

As a result, traders began shedding the geopolitical risk premium that had temporarily pushed crude prices up by more than 10% since the beginning of the hostilities. The reassessment reflects a direct causal relationship between the perception of conflict severity and near-term oil pricing. With military escalation deemed unlikely in the immediate term, oil prices reverted closer to levels consistent with broader supply-demand fundamentals.

Return to Supply-Demand Anchoring

Even before the ceasefire announcement, JPMorgan analysts were urging caution against overreacting to geopolitical tensions. While they acknowledged that a worst-case scenario involving the closure of the Strait of Hormuz could send oil to $120–130 per barrel, their base case remained conservative. In the absence of actual supply disruption, the bank projected oil to trade in the low-to-mid-$60s for the remainder of 2025 — a scenario that is now regaining credibility.

Natasha Kaneva, head of global commodities strategy at JPMorgan, emphasized that global supply remains sufficient, particularly with higher U.S. production and spare OPEC capacity available. Without a prolonged geopolitical shock, pricing pressure from military risk is unlikely to sustain itself.

Market Sentiment Rebounds as Energy Pressure Recedes

In tandem with the drop in oil prices, equities saw modest gains and the dollar weakened against major currencies, reflecting a broader return to risk-on sentiment. Investors, who had previously feared that high oil prices could reignite inflation and pressure the Federal Reserve to delay rate cuts, now see a more benign environment where energy-induced price shocks may not materialize.

The ceasefire also dampens the immediate threat to energy-intensive sectors and economies highly reliant on oil imports. In that sense, the market repricing is not merely speculative, but rooted in a recalibrated macroeconomic outlook.

Oil Retreat Reflects De-escalation, But Volatility Risk Lingers

The steep decline in oil prices following Trump’s ceasefire announcement illustrates how geopolitical tensions can be swiftly unwound when perceived as resolved. The symbolic nature of Iran’s response and the absence of major supply disruptions suggest that oil may stabilize within a tighter range, aligned with pre-conflict fundamentals.

However, the truce remains fragile, and any sign of renewed confrontation — or attempts by Iran to rebuild its nuclear infrastructure — could reintroduce volatility. For now, though, markets are trading on the assumption that diplomacy has temporarily prevailed over escalation, and oil is repricing to reflect a world once again flush with supply and absent immediate war-driven scarcity.

Source: Yahoo Finance

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Kevin Du

Economic

The federal reserve now eases its regulatory constraints towards crypto, clearing the path for banks to serve cryptocurrency firms.

In a significant shift in regulatory policy, the Federal Reserve has officially removed the reputational risk factor from its bank supervision framework, enabling banks to more freely engage with cryptocurrency firms.

This move aligns the Fed with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), which have made similar changes to their oversight protocols this year.

A New Era for Banking and Crypto

The Federal Reserve’s decision, announced on June 23, marks a pivotal moment for the integration of traditional banking with the rapidly evolving cryptocurrency sector.

By eliminating the subjective reputational risk standard from examination manuals, the Fed aims to create a more conducive environment for banks to provide services to crypto companies, ranging from custody solutions to transactional support.

This regulatory update comes as part of a broader initiative to allow banks to participate in digital asset markets without the fear of being penalized for reputational concerns.

The Fed’s directive emphasizes that examiners will focus on measurable financial risks rather than subjective assessments.

Impact on Banks and Crypto Firms

The implications of this policy shift are profound.

Previously, banks had been reluctant to serve crypto clients due to concerns over reputational damage, which often stemmed from the volatile nature of cryptocurrencies and regulatory scrutiny.

With this new guidance, banks can now confidently offer services such as buying, selling, and holding cryptocurrencies, positioning themselves as key players in the digital asset ecosystem.

Training and Consistency in Implementation

To ensure uniformity in the application of this new policy, the Fed will provide training to examiners across all Board-supervised banks.

This initiative aims to promote consistent practices in how banks engage with cryptocurrency firms, thereby fostering a more stable and predictable environment for both institutions and clients.

Regulatory Context and Future Outlook

The Fed’s decision follows a series of remarks from Chair Jerome Powell, who has advocated for a clearer and more supportive regulatory framework for digital assets.

In a speech delivered in April, Powell urged Congress to establish guidelines for stablecoins and emphasized that the Fed does not intend to limit lawful banking relationships with crypto firms.

This policy shift comes at a time when legislative efforts, such as the recently passed GENIUS Act, aim to create comprehensive regulations for fiat-backed stablecoins.

The alignment of regulatory bodies reflects a growing recognition of the need to support innovation in the financial sector while ensuring safety and soundness.

Challenges Ahead

While the removal of the reputational risk factor is a positive step, challenges remain.

Banks must still navigate a complex regulatory landscape, including capital and liquidity requirements, as they expand their services to crypto firms.

Additionally, the recent volatility in the cryptocurrency market may pose ongoing risks that banks need to manage effectively.

A Positive Step for the Crypto Ecosystem

The Federal Reserve’s decision to clear banks for cryptocurrency services represents a landmark development in the ongoing integration of traditional finance with digital assets.

By focusing on tangible financial risks and eliminating reputational concerns, the Fed is paving the way for a more collaborative relationship between banks and crypto firms.

As regulatory clarity increases, the cryptocurrency market is likely to see enhanced participation from traditional financial institutions, potentially leading to greater innovation and stability in the sector.

Source: CryptoSlate

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Gerik

Political

Middle East Situation

Ceasefire Surprise Eases War Fears, But Ambiguities Persist

In a dramatic turn, President Donald Trump declared that Israel and Iran had agreed to a "complete and total" ceasefire, aiming to halt the military exchanges that followed Israel’s strikes on Iranian nuclear sites. The ceasefire, announced via Truth Social, was framed as a breakthrough toward long-term regional stability. However, within hours, ambiguity surfaced. Iranian Foreign Minister Abbas Araghchi publicly denied the existence of a formal agreement but signaled that Iran would halt further retaliation if Israel ceased hostilities by 4:00 a.m. Tehran time.

This asymmetric messaging reveals a tenuous pause rather than a definitive cessation. The lack of Israeli confirmation and continued air defense activity in Iran complicate any conclusion that the conflict has fully ended. Still, both sides are signaling conditional restraint, suggesting a de facto mutual freeze is possible if political posturing does not give way to renewed aggression.

Market Response: Risk-On Sentiment Returns

The ceasefire news triggered immediate relief across global markets. West Texas Intermediate crude prices fell by up to 6% in early Asian trading, reversing a rally driven by fears of energy supply disruption. Equities responded positively: S&P 500 futures rose 0.5%, and Asian markets opened higher. The dollar weakened against major currencies as investor risk appetite returned.

These movements reflect a causal response: diminished conflict risk reduces expected oil supply shocks, which in turn lowers inflationary pressure and enhances confidence in economic stability. However, the market’s optimism remains fragile and could unwind rapidly if hostilities resume or if the truce proves unsustainable.

Strategic Implications: Diplomacy Over Deterrence?

Behind the ceasefire is a complex web of backchannel diplomacy. Trump’s White House coordinated directly with Israeli Prime Minister Benjamin Netanyahu and, through intermediaries such as Qatar, engaged Tehran. Vice President JD Vance and Secretary of State Marco Rubio were reportedly instrumental in bridging communication. According to U.S. officials, the understanding was conditional: Israel agreed to stop strikes if Iran ceased retaliatory missile launches, and Iran signaled willingness to comply under those terms.

Despite the breakthrough, key questions remain unresolved, especially concerning Iran’s nuclear capability. U.S. officials claim the airstrikes eliminated Iran’s ability to construct a bomb, with enriched uranium stockpiles either destroyed or rendered inaccessible. Yet international monitors report that they cannot confirm the location or status of this material—leaving open the possibility of future reconstitution and renewed tension.

Iran’s Symbolic Response and Strategic Restraint

Iran’s missile strike on Al Udeid Air Base in Qatar appeared to be deliberately restrained. The base had been evacuated in advance, and no casualties were reported. According to Iranian state media, the number of missiles fired matched the number of U.S. bombs dropped on Iranian nuclear sites—a clear signal of performative rather than escalatory retaliation. This symmetry suggests Iran is carefully managing its responses to avoid triggering a wider conflict while maintaining its domestic posture of resistance.

Analysts such as Daniel Shapiro and Ziad Daoud interpret the missile attack as a calibrated move that leaves space for diplomacy. If the ceasefire holds, it could evolve into a broader negotiation framework on Iran’s nuclear program, though that outcome remains uncertain.

Political Optics and Strategic Leverage

For Trump, the ceasefire represents a potential foreign policy coup ahead of pivotal domestic and international milestones. A swift resolution to a crisis that threatened global oil markets and regional stability could bolster his international credibility and campaign narrative. His statement that the truce could last “forever” is politically ambitious but strategically premature given Iran’s conditional acceptance and Israel’s silence.

Nonetheless, the announcement reframes Trump’s recent military decision not as a gateway to war but as a bargaining chip that forced de-escalation. Whether this reinterpretation gains traction will depend on how events unfold in the coming days—especially regarding verification of Iran’s nuclear dismantlement and whether any covert reconstitution efforts emerge.

A Pause, Not Yet a Peace

The tentative ceasefire between Israel and Iran, as announced by President Trump, marks a critical juncture in a fast-moving geopolitical crisis. While early market reactions suggest optimism, the underlying political and military conditions remain volatile. With no formal written agreement and signs of ongoing air activity, the ceasefire is best understood as a pause—strategic and potentially fragile—rather than a durable peace.

The next phase will hinge on sustained restraint, credible verification of nuclear disarmament claims, and the willingness of all parties to shift from symbolic retaliation to substantive diplomacy. Until then, global markets and political observers will remain on edge, watching for confirmation that this ceasefire is not just a moment of calm, but the beginning of a deeper strategic realignment.