The global foreign exchange market has seen significant fluctuations today, March 5, 2025, as the United States Dollar (USD) continues to trend downward, reflecting various economic pressures. The Dollar Index (DXY), which measures the USD against six major currencies, reported a decline of 1.15%, landing at 105.59 points. This marks one of the lowest recordings for the dollar since December 2024. Key factors influencing this downturn include the implementation of new tariffs and concerns surrounding economic growth.
Earlier today, the State Bank of Vietnam announced a reduction of three dong for the central exchange rate of the Vietnamese Dong (VND) against the USD, setting it at 24,755 VND/USD. The reference USD exchange rate at the State Bank is presently at 23,568 - 25,942 VND/USD, reflecting slight declines on both buying and selling fronts compared to previous trading sessions.
At commercial banks, the exchange rates show similar downward trends. For example, Vietcombank lists its USD rates at 25,360 VND for buying and 25,750 VND for selling, which is down by 30 VND from yesterday. VietinBank offers slightly lower rates at 25,210 VND buying and 25,790 VND selling, also indicating a drop.
Meanwhile, on the black market, the USD has seen some action with reports indicating trading levels around 25,761 - 25,831 VND/USD, reflecting a modest increase of 9 VND compared to the previous day’s rates.
Internationally, factors tied to President Donald Trump's fiscal policies seem to have contributed significantly to the status of the USD. Recent tariff implementations, including 25% on goods from Canada and Mexico and increased tariffs of up to 20% on Chinese goods, took effect on March 4. China has responded by announcing its own additional tariffs of 10-15% on certain U.S. imports, which are set to begin on March 10. These tariff strategies have raised concerns about potential trade conflicts, which may hinder overall economic growth.
"The new tariffs could significantly affect inflation and growth, as echoed by former U.S. Treasury Secretary Robert Rubin during investment discussions yesterday," indicating the comprehensive ripples of these policies. Despite potential strengths from these tariffs, domestic economic weakness appears to be stifling any upward momentum for the USD.
The DXY’s recent drop to levels not seen since December reveals just how much market mood is affected by economic guidance. Increasing investor preference for traditional safe havens, such as the Japanese Yen and Swiss Franc—which rose by nearly 1%—underscores the significant anxiety permeated by fears of trade wars and sluggish growth.
Against this backdrop, the British pound reached its highest level against the USD since mid-December, closing at 1.2784 USD, which represented a 0.7% increase. Also noteworthy is the Euro, which climbed to approximately 1.0611 USD, influenced by recent developments concerning the establishment of infrastructure and increased defense spending by Germany, as well as anticipated mineral agreements between the U.S. and Ukraine.
Increasingly, these currency shifts signify underlying market tensions, encouraging speculations on where the Federal Reserve might head with its policy adjustments. The February non-farm payrolls report—set to release on March 7—could provide added insights influencing Federal Reserve policy direction, whether they continue easing or hit pause.
With the present pressures on the USD and the economic outlook appearing clouded, market participants are watching closely, expecting volatility, especially with impending economic reports and geopolitical developments likely influencing future currency strategies.
To summarize, as of March 5, 2025, USD exchange rate fluctuations reflect broader global market concerns driven by recent U.S. tariff policies and international reactions. This environment establishes groundwork for continued observation and adaptation within both the forex market and broader economic sectors.