Strategy Note – A RISING DOLLAR WILL HAVE A MIXED IMPACT ON VIETNAMESE CORPORATE EARNINGS

The US Fed raised policy rates for the second time this year in the last meeting held in mid-June and they expect to follow through with two further rate hikes within the rest of 2018. The faster-than-expected return in inflation and continued tightening of the US labor market has even spurred expectations of a total of four rate hikes this year. These factors, combined with rising risk aversion around an imminent trade war between the US and China has triggered a rush into safe haven assets and, as a result, the dollar has surprised with its strength over the past few months. The dollar index rose to 95.1pts on June 20th 2018, the highest level seen since July 2017, before slightly retracing to touch 94.4 pts.

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