(TIỂU LUẬN) assignment 2 – FX market analysis and trading strategies

Subject Code: BAFI3182 Subject Name: Financial Markets Location & Campus RMIT Vietnam , SGS TRAN QUYNH NHU – s3715434 Student name: TRUONG QUYNH NHU - s3694814 AN THANH HANG - s3634827 Teachers Name: Mr M Truong Assignment – FX Market Analysis and Trading Strategies Table of Contents EXECUTIVE SUMMARY I INTRODUCTION II ANALYSIS AND TRADING STRATEGIES FX MARKET PAST BEHAVIOR ANALYSIS FX MARKET ELEMENT ANALYSIS 2.1 INFLATION RATE 2.2 INTEREST RATE 2.3 ECONOMIC GROWTH 2.4 INTERNATIONAL SPECULATION 2.5 FX EXPECTATION 2.6 COMMODITY PRICE (GOLD/OIL) 2.7 OFFICIAL INTERVENTION 2.8 SUMMARY 6 11 14 15 16 17 17 III 17 IV TRADING STRATEGY TRADING STRATEGY FOR USD/CNY BID/OFFER TRADING STRATEGY FOR USD/VND CONCLUSION V APPENDIX VI REFERENCES 18 21 22 23 23 Executive Summary This report is aimed at deriving appropriate strategies to benefit from currency fluctuations in the foreign exchange market for the Vietnamese Bank Vietcombank-Joint Stock Commercial Bank for Foreign Trade This report will consist of two main parts: (1) an analysis of foreign exchange market behaviors and related elements; (2) recommended trading strategies In order to deliver the best advice, this report will take into consideration many elements that can directly affect the currencies such as past FX market behaviors, economic elements indirectly influencing the currency of all three nations USA, China and Vietnam i.e economic growth, relative inflation rate, relative interest rate, international speculation, foreign exchange market speculation, commodity prices and official intervention Despite careful analysis, there is currently high volatility in the foreign exchange market as of now due to the brewing trade tensions between China and the US Thus, we will offer risk management strategies in the case of unpredictable market changes due to any changes in world events With an expectation that within the next months, the USD will depreciate against the CNY and VND, our strategy is to sell off USD at the moment to buy CNY and VND and later on after months we will try to buy back the USD to square our position Should the market follows our expectation, the planned profit will be CNY 3,771,700 and VND 802,000,000 To manage unexpectable risk, we also recommend trade in small quantity and follow closely to the exchange rate, to have any needed action should the market go against our plan I Introduction Vietcombank-Joint Stock Commercial Bank for Foreign trade of Vietnam is one of the biggest bank in the Vietnamese market capitalization with an estimated evaluation of 85,014 billion VND (US$3.98 billion) as stated in Ho Chi Minh City Stock Exchange (CafeF.vn, 2018) JSC Bank for Foreign Trade of Vietnam, once known as Bank for Foreign exchange of Vietnam, was established on April 1st, 1963 from the Foreign Exchange Bureau (of the State Bank of Vietnam), becoming the first commercial bank decided for pilot privatization by the Government After over 50 long periods of development and advancement, Vietcombank has contributed essentially to the strength and development of national economy, maintaining the part of a considerable foreign exchange bank in encouraging productive domestic economy and additionally impacting significantly on local and worldwide money related network Specifically in this report, our team working for Vietcombank sets the main objective is to develop an strategy of trading in the foreign exchange market We chose two pairs of currencies which are USD/CNY and USD/VND since there have been a number of remarkable economic events recently affecting the market We predict that USD will depreciate against and CNY The report will include analysis of past performance of both currencies and the trading strategy for 2019 II Analysis and trading strategies FX Market Past Behavior Analysis 1.1 USD/CNY Figure 1: USD/CNY exchange rate 2015-2018 (reproduced from Thomson Reuters Eikon) It can be clearly seen that the relationship between USD and CNY was extremely unstable from 2015 to half of 2018 With China’s effort to modify the traditional fixed exchange rate, China-USD exchange rate was gradually increasing its value from quarter 2, 2015 then reaching a peak at 6.9330 in December when China became the US’s biggest trading partner with the trading valuation was valued at $441.6-billion (U.S.) to the end of September which accounted for 15.7% of total U.S trade quantity, according to the U.S Commerce Department (IAN, 2016) However in 2017, The U.S trade deficit with China set a record since Canada became the US no.1 foreign oil supplier with price lower than the average climb at that time which lead to a dramatically fall in exchange rate until the second quarter of 2018 (Ken, 2018) Figure 2: USD/CNY forecast exchange rate 2015-2018 (reproduced from Thomson Reuters Eikon) The exchange situation has been increasing remarkably to the historical peak when the US president Donald Trump announced to set up policy to put tariff on Chinese goods trade to the US (Sophie, 2018) However since July when the tariff will be applied directly, the trading activities are predicted to decrease (purple line in the figure 2) As a result the exchange rate between USD and CNY is forecast to drop Additionally, China Yuan has been weaken due to the government’s strategy and soon rising up, USD might depreciate against CNY in the next period of time (Chaeng, 2018) 1.2 USD/VND Figure 3: USD/VND exchange rate 2015-2017 (reproduced from Thomson Reuters Eikon) Contrast to CNY, the exchange rate of VND and USD has been increasing constantly since 2015 Even though there were some fluctuate in 2016, the USD raised its value by 22,800 in 2017 as a result when Vietnam has considered the United States as its top single-country export partner and shipping value is approximately $46.484 billion last year (Ralph, 2018) The trading between currencies rose significantly during the first months of 2018 with the trading activities up to $27.44 billion according to US Census Bureau data Figure 4: USD/VND forecast exchange rate 2018-2019 (Retrieved from Thomson Reuters Eikon) However, Vietnam is forecast to reduce the trade with US due to the decision of the US president Donald Trump to withdraw from Trans-Pacific Partnership (TPP) in which trade agreement will obliterate the main priority of trade relations between Vietnam and USA (Everycsrreport.com) That is the reason why the exchange rate between countries is predicted to go down (purple line in the figure 4) FX market element analysis 2.1 Inflation rate 2.1.1 US inflation rate Figure 5: US inflation rate (Retrieved from Thomson Reuters Eikon) The US inflation rate has been steadily increasing since the beginning of the year to a high of 3% from its 1.7% since the beginning of 2018 This reflects steady economic growth in the US However, despite a tightening labour market, wages growth remain slow, not catching up to the rise in inflation The Federal Reserve recent increase interest rates is expected to counteract this rising inflation rate Figure 6: US inflation rate forecast (Retrieved from Thomson Reuters Eikon) The Federal Reserve recent increase interest rates is expected to counteract this rising inflation rate Hence, it is projected that the US inflation rate will slow down in the next few quarters to 2.70% and 2.50% from its current high of 3.0% 2.1.2 China Inflation rate Figure 7: China inflation rate 2015-2017 (Adapted from Thomson Reuters Eikon) China’s inflation has been steadily decreasing from its high at 3% since the beginning of 2018 down to 2.0% in July 2018 It is expected that it will continue steadying out to 2.20% by the end of 2018 Figure 8: China’s inflation forecast 2018-2019 (Retrieved from Thomson Reuters Eikon) 2.1.3 Vietnamese Inflation rate Figure 7: Vietnam inflation rate 2008- 2018 (Adapted from Thomson Reuters Eikon) Overall, there has been a reducing trend in Vietnam’s inflation rate thanks to government effort to adjust policy On a monthly basis, consumer prices edged up 0.08 percent, following a 0.27 percent drop in March Inflation Rate in Vietnam averaged 6.44 percent from 1996 until 2018, reaching an all-time high of 28.24% in 2008 and ending up at 3.15% in 2018 However, inflation rate has been alternated frequently during the time of 2016-2018 In 2017, the Vietnamese economy achieved a double success: controlling inflation and economic growth exceeding the target set by the National Assembly (NA) as the average CPI increased 3.53 per cent over 2016 and 2.6 per cent compared to December 2016, fulfilling the target of keeping the rate under per cent for the whole year (Vietnamnet, 2018) However, inflation rate in 2018 are forecasted to be pressured as long as economic growth are also predicted to increase Vietnam’s inflation will be mainly pressured by change in the prices of public services and food as well as fluctuation of oil price which already rise the inflation to 3.15% in January 2018 (Nhan Dan Online, 2018) 2.2 Interest Rate The interest rate has an important correlation with the strength of a currency as interest rates will often influence the decisions of investors Should interest rates go up, it would prove to be beneficial as investment would see higher returns and vice versa Thus, higher investment will drive up demand for the US dollar and cause it to appreciate Figure 8: US interest rates forecast (Retrieved from Thomson Reuters Eikon) The Federal Reserve have been steadily increasing interest rates over the past few years and is expected to continue increase the interest rate in the next few quarters (Reuters, 2018) As can be seen above, the interest rate is currently at 2% and is expected to go up to 2.1% and 2.4% in the last two quarters of 2018, respectively While usually, interest rates increases might boost investment, current slow wages growths coupled with low employment and rising inflation indicates no real benefit for investors Thus this increase in interest rates will not have much effect on the currency strenth in the near future 2.3.2 Vietnam growth Vietnam is expected to continue strong growth throughout the end of 2018 and to 2019 with predicted growth rates at 7.1% and 6.8%, respectively (Asian Development Bank, 2018) Recent rises in global trade prompted exports to rise by 21.2% (Asian Development Bank, 2018) This growth is also prompted by a high increase in aggregate demand since 2017 has been ushered by strong demand from the private sector fueled by FDI as well as private consumption Stable rise in income and a steady rate of inflation is another confirmation for investors’ confidence Vietnam projected growth rate in 2018 (Adapted from Thomson Reuters Eikon) Figure 12: Vietnam GDP quarter % change forecast (Retrieved from Thomson Reuters Eikon) Recent trade tensions between China and the United States did have some minor impacts on the Vietnam economy as indicated through its currency depreciation as well as stock market plummits The affect from the trade war on Vietnam was indirect as the tarriffs on Chinese goods were the hi-tech produces and not on essential goods such as energy It was rather prompted by investors’ overreaction to the uncertainty, causing them to withdraw capital from emerging markets such as Vietnam However, it is expected to recover as trade tension eases between the two economic powerhouses In addition, as one of the strongest emerging economies in SEA with the highest and most stable growth rate (Asian Development Bank, 2019) Thus, it is expected the Vietnamese dong will recover despite losses from the Chinese-US trade tension impact 2.3.3 Chinese growth As China is one of the fastest growing economy in the world, there have been recent focus on ensuring that growth is sustainable and high quality Growth rates still remain at one of the highest in the world at 6.40% in the second quarter of 2018 Because of the focus on building more sustainable growth, it is projected that growth will steadily slow down with 6.30% being the forecast for the third and fourth quarter of 2018 (Thomson Reuters) Figure 13: China GDP quarter % change forecast (Retrieved from Thomson Reuters Eikon) This growth is prompted by the surge in export demand as well as private consumption thanks to rising income and a stable inflation rate There have also been a focus on infrastruture investment prompting higher domestic consumption High growth rates and a re-focus on sustainable growth will be an assurance for investors’ confidence and will encourage more consumption of the Chinese Yuan However, the recent trade war between the US and China cause major doubts among investors as we see the Chinese Yuan plummeted for consecutive weeks But recent talks of a meeting between the two governments have eased tensions Thus, it is expected that the Yuan will recover and appreciate in the next few quarters 2.4 International speculation International speculation play a major role in the foreign exchange market as speculative buying make up a large section of it as well as drive investment decisions In this case, the ongoing trade war between US and China is a significant event to look to as it has already caused major shifts in the foreign exchange market Impacts of the trade war might heavily affect the currency of both China and the US as tariffs from the US might cause a deficit up to $50bn on Chinese goods This has cause the Chinese Reminbi to slope down for consecutive weeks causing much concerns among foreign investors The depreciation of the Chinese Yuan has a reverse effect than what the US president might have intended as it only made Chinese exports more attractive to investors due to the low prices The rising demand for Chinese goods will cause a higher demand for Chinese Yuan causing the currency to move up in the near future Plus, the US trade deficit with China remain at an all time high, suggesting despite recent hikes in the dollar, it will eventually depreciate against the Chinese Yuan In addition, there have been recent efforts to negotiate between China and the US to ease tensions Thus, the Chinese Yuan should appreciate in the next few quarters Figure 14: CNY/USD and VND/USD forecast (Retrieved from Thomson Reuters Eikon) The effect of the trade war between the US and China had a wide ranging impacts on many of their partner countries, including Vietnam The spill-over effects from the trade tensions has cause currency in the Asian region, especially Vietnam to depreciate for many weeks due to the uncertainty and risk-aversion behaviors from investors However, as news of talks between the governments suggest ease in trade tension, the Chinese Yuan is expected to stabilize and rise again In effect, it will pull up the Vietnamese Dong as Vietnam’s economy itself is an emerging economy with currently one of the highest growth rates in the Southeast Asian region 2.5 FX expectation Expectations of the foreign exchange market will have an influence on the currency as speculators buy and sell currencies base on their speculations in hopes of arbitraging from the differences in prices It is no surprise that the effects of the brewing trade war between China and America has cause speculation to go wild Recently, thanks to the US-China trade talks scheduled for August 21-22 (Reuters, 2018), confidence in the USD has subdued as can be seen by a drop in the US dollar index in the past few days The US dollar index is a good indicator of the reaction and speculation as it measures the US dollar against a basket of six other major currencies, indicating that the strengthening of the US Dollar was only temporary due to the imposing of the tarriffs Figure 15: US Dollar Index (Retrieved from Thomson Reuters Eikon) While it is only early talks, current economic conditions among China, US shows that China still remains the more prospective economy This will reassure investors confidence, causing the Chinese Yuan to appreciate 2.6 Commodity price (gold/oil) Commodity prices have a close relationship with the US dollars as most commodity trade are done through the US dollars Commodity prices have an inverse relationship with the US dollar as commodity prices increase in the US dollars, demand will decrease thus causing the dollar to depreciate Meanwhile, this indicates that prices of other currency will appreciate Thus, it is a good indicator to look at while evaluating future performance of the foreign exchange market The World Bank predicted that commodity prices will increase overall in 2018 due to rising geopolitical tensions, overall upward price momentum as well as the OPEC agreement to cut oil supply Thus, this will undoubted cause the US dollar to depreciate overall in the near future Figure 16: Commodity prices index (Retrieved from World Bank Data) 2.7 Official intervention Official intervention can greatly effect the currency of these countries especially China and Vietnam as both countries’ governments still directly manage their currencies In addition, government can also influence the exchange rate through fiscal policy as interest rate play a direct role in influencing investment and demand for one country’s currency Recent changes in the exchange rates have prompted the Vietnamese government to limit the VND devaluation to a minimum and let the VND recover to a similar point to what is was at the end of 2017 to stabilize trade (Reuters) For China, its government recent focus of tightening the credit risk has given rise to investor confidence Their government has set a focus on reforming its economy once more to transition from fast growth to more stable growth with a focus on high technology and a stable credit rating This will elevate the Chinese economy to become a more stable, developed economy as opposed to its current status as a developing nation This will increase confidence in investors, domestic confidence, interest rates as well as maintain low inflation All of these are factors which can directly influence the currency exchange rate 2.8 Summary In conclusion, the Chinese Yuan and the Vietnamese Dong will both appreciate against the US dollar, although at a very small rate Despite increasing interest rates in the US, its high inflation will detract investors Meanwhile, ease in trade tensions will cause speculative behaviors to bring up the VND and the CNY In addition, the strength in exports in both Vietnam and China is another indication for both currencies to recover from its recent depreciation as it is vital for their trade stability This recovery is an opportunity for the bank to gain from Nonetheless, this is still a very volatile situation and must be treaded carefully in order to gain from the CNY and the VND appreciation III Trading Strategy The major objective of our FX trading plan for the upcoming period is to take advantage of the current situation to earn the company optimal profit while managing closely to the risks associated to our FX transactions From the research and market analysis, we forecast that over the next month, the USD would depreciate against both the CNY and the VND; to achieve the aforementioned goal, our plan is to go long for the CNY and go short for USD in the beginning of the period Such strategy can pose some risks regarding liquidity issue, as USD is the most liquid currency, shortage in this currency can lead to many problems in the future However, with China being the one of the top foreign investor for Vietnam in 2017, we also believe that there is always a demand for CNY in the Vietnamese market, and holding CNY would not hold major risks But to minimize the risks imposed, before setting the daily quotes, VCB need to take into deep consideration the availability of both the VND and USD currently in the bank Moreover, due to the high volatility of the FX markets and the currency prices, we recommend that for every quarter we should end with a square balance for security; this would prevent the company from exposing to high risks as the longer it takes for a business to square their position the higher the possibility that the currency will perform off-track from our initial expectation To avoid major losses, our suggested plan consists of trading in small amount as well as squaring off as soon as possible, should there be any unfavorable events leading to a rapid decrease in the currency we are holding Trading strategy for USD/CNY bid/offer For the next six months, as our research suggests, the USD would depreciate against the CNY From the beginning of the period, we plan to use the USD to buy CNY when the USD/CNY rate is highest, and sell CNY for USD later to earn profit and square our position In order to so speedily and effectively, our exchange rate for USD/CNY needs to be adjusted to attract more investors to sell their CNY; more specifically, we have to move our quotes to the left By decreasing both the bid and the offer quotes up to pips allowing room for us to adjust in accordance to the market demand, we, as the price makers, would discourage people from selling USD and they would be more willing to buy USD as our offer is lower than that of the market it is recommended to move the quotes to the left - reduce both the bid and offer quotes by pips, which enables us to go flexible with the market demand Consumers are expected to buy USD instead of selling USD since we offer a more reasonable one from the market Our target sellers are corporates and firms, specifically those who export their product to China Because these firms tend to be long in CNY, especially after the first half of the 2018, and are looking forward to squaring their position as soon as possible After which we can readjust our bid/offer in accordance to the response we get from the sellers Corporates and firms are our target sellers, especially those export their products to China, since these firms aim to square their position as fast as possible with a tendency to be long in Chinese Yuan, especially after the first two quarters of 2018 Then we would adjust our bid and offer suitably based on what we get from the sellers response Preferably, should the demand for USD is high, we can increase our bid/offer close to the market price rate to minimize cost and maximize profit On the other hand, if the opposite happens, we can slowly decrease our bids down to another pips to encourage people to sell CNY for USD, but that should be the limit and the bank should not go any lower than that If the USD attracts higher demand, we would raise our bid/offer closer to the market price real figure to reduce the cost and optimize our profit In the case that the demand for US dollar is low, we would gradually decrease our bids down by pips with a view to encouraging investors to sell CNY for USD After that, until the end of the first three months, our main aim is to sell off the CNY we have acquired initially, slowly and steadily so as not to exposing ourselves to major risks Up until this time, we would move our quotes back to the right; to encourage people to sell the USD and buy CNY, it is needed that we increase both the bid and offer quotes for USD/CNY, this would attract the attention of Chinese Investor in Vietnam to sell USD for CNY, because we are bidding them a more attractive price for the USD than the market average After the first quarter, we would sell off the CNY profit we gained with a steady degree in order not to face with unexpected risks We would move back our quotes to the right: raising both the bid and offer quotes for USD/CNY, which drives people to sell USD and buy CNY, as we bid them an attractive USD price compared to the market If the market behaves in the way that we have expected, after months, we would earn a total profit of CNY 3,771,700 The proposed interest below is extracted from Thomson Reuters Eikon We expect to generate a total profit of CNY … after conducting our above plan The detail of the execution of our plan will be illustrated in details in the tables below: Month USD in million Position Sell -7 Down Buy -2 Down Buy Square Table 1: Trading Position for VCB from September to November – 2018 Month USD CNY Rate USD/CNY (7,000,000) 48,424,600 6.9178 5,000,000 (32,100,000) 6.8200 2,000,000 (12,620,400) 6.8102 3,704,200 Table 2: Profit and Loss Statement from FX Trading activities from September to November – 2018 For the next months, we expect that the depreciation rate of CNY against USD would slow down substantially, to minimize the risk, in this period using the same strategy as above, we would only look forward to sell USD million initially, and the details are illustrated as the table below Month USD in million Position Sell -3 Down Buy -1 Down Buy Square Table 3: Trading Position for VCB from December 2018 to February 2019 Month USD CNY Rate USD/CNY (3,000,000) 20,351,100 6.7837 2,000,000 (13,533,600) 6.7668 1,000,000 (6,750,000) 6.7500 67,500 Table 4: Profit and Loss Statement from FX Trading activities from December 2018 to February 2019 Risk Management Plan: We are well aware of the volatility of the FX market and how unstable the exchange rates are, especially the USD/CNY pair due to the current unstable economics condition from the trade war between two countries Our recommendation to cope is to square the position immediately, should the following conditions apply: The USD/CNY rates decreases considerably faster than our expectation and after reaching a bottom (the lowest we suspected is 6.8102 for the first three months and 6.75 for the latter) and starts to increase again (our benchmark is 50 pips from the bottom benchmark) We should close the deal immediately and square our position to secure the benefit The USD/CNY rates increases due to unfavorable conditions such as new tariffs imposed on China, or other macroeconomics factors, which surpass our 200 pips of loss anticipated; we should sell of our CNY for USD to minimize potential losses From the beginning of September, we expect that the USD/CNY rates would still increases slightly due to the lag effect of the new tariff imposed by President Trump on China For the first half of September, we would recommend divided the initial USD million and sell it in smaller amount every two days, keeping a close eye on the interest rate; as soon as the USD/CNY rates starts decreasing we would sell of the entire remaining USD for CNY Moreover, as the exchange rates fluctuate constantly, while dealing with the sellers or the buyers, VCB needs to be well aware of the changes in the exchange rate before the deal can be closed; for the most favorable rate for our company, we are required to keep a close look on changes in exchange rate in a timely matters as well as closing our deal as soon as possible to prevent unwanted outcomes To minimize this risk, we suggest that VCB should transaction with domestics firms and corporations in order to close the deal as fast as possible Another risk management plan we would like to propose is to utilize many other currencies such as Euro, AUD, or VND, etc to acquire the initial needed figure for CNY and at the end to buy back USD In this way, the impact of a sudden depreciation of CNY or an appreciation of USD would be softened Because investing a great deal of money in just one currency pair is extremely dangerous and sharing that risk for many other pair of currency would be a much safer option, therefore we would not at a high risk of losing a lot of money Moreover this plan would minimize the liquidity risk; we would not be at stake of not having enough USD for operation Trading Strategy for USD/VND According to our research and the speculation extracted from Thomson Reuters Eikon, the USD would only slightly depreciate against VND Moreover, due to the high instability of the Vietnamese Currency, we not recommend going long for VND and go short for USD for any longer than the end of 2018 For the last quarter of 2018, to increase the demand for USD and attract people to sell VND, we move our quotes to the left, by decreasing both the bid and offer quotes we would again encourage people to buy USD and sell VND And latter on moving toward the end of the 2018, we would move the quotes to the right, we are now bidding higher than the market price to promote people to sell VND, giving us the opportunity to buy back the USD and square our position Using the same model that applies for the trading strategy of USD/CNY, but as we suspect that the gain from the USD/VND pair (at 90 pips) is much lower in comparison to USD/CNY (over 1000 pips), we only suggest beginning the trading with selling USD million For the first two month of 2019, to secure our profit, our recommendation is that we would only earn profit based on the spread of the bid and offer, and squaring our position daily as the exchange rate for USD/VND tends to fluctuates greatly and the VND can depreciate at any time Should the exchange pattern follow our expectation, after the first three months, an addition profit of VND 802 million can be earned Month USD in million Position Sell -4 Down Buy -1 Down Buy Square Table 5: Trading Position for VCB from September to November – 2018 Month USD VND Rate USD/VND (4,000,000) 92,788,000,000 23,197 3,000,000 (68,997,000,000) 22,999 1,000,000 (22,989,000,000) 22,989 802,000,000 Table 6: Profit and Loss Statement from FX Trading activities from September to November – 2018 Risk Management Plan: Our maximum profit we anticipated from this trading deal is around 90 pips, should the rates decreases in our favor and reaches this level, we would square of immediately As the VND is relatively unstable and is expected to depreciate against USD at any moment, if the USD/VND increases by 40 pips, we would recommend squaring off the position instantly to prevent further losses IV Conclusion After our research conducted on the past performance of USD/CNY and USD/VND as well as analyzing other macroeconomics factors such as inflation rate, interest rate, growth rate, interventions, commodity prices, we have finally come to our conclusion that during the next months, the USD would depreciated against both the CNY and VND; however we are more confident about the appreciation of the CNY so we suggest to go long for CNY for the period and square our position at the end to maximize profit If the FX market behaves according to our expectation, after months we would earn a total profit of CNY 3,771,700 and VND 802,000,000 Still, there is much volatility in the FX trading market and VCB has to keep a close observation on the fluctuating exchange rate and react immediately to prevent unwanted outcome V Appendix Speculated Exchange Rate for USD/CNY and USD/VND (Retrieved from Thomson Reuters Eikon) VI References Baffes J., (May 2018) Why commodity prices are rising in nine charts World Bank Forum Retrieved from http://blogs.worldbank.org/developmenttalk/why-commodity-prices-arerising-nine-charts Glenn E (July 2018) Economists raise China’s 2018 GDP growth forecast despite trade uncertainty [online] Retrieved from https://www.reuters.com/article/us-china-economypoll/economists-raise-chinas-2018-gdp-growth-forecast-despite-trade-uncertaintyidUSKBN1K20Z7 International Monetary Fund (2018) Less Even Expansion, Rising Trade Tensions World Economic Outlook [online] Available at: https://www.imf.org/en/Publications/WEO/Issues/2018/07/02/world-economic-outlookupdate-july-2018 [Accessed 13 Aug 2018] Julia Kollewe (16 August 2018) China to send delegation for US talks to avert trade war Reuters Retrieved from https://www.theguardian.com/business/2018/aug/16/china-tosend-delegation-for-us-talks-to-avert-trade-war [Accessed 13 Aug 2018] J Tankersley and N.Irwin (July 2018) Federal Reserve raise interest rates The New York Times Retrieved from https://www.nytimes.com/2018/06/13/us/politics/federal-reserveraises-interest-rates.html OECD (2018) Economic Outlook Report May 2018 [online] Retrieved from http://www.oecd.org/eco/outlook/economic-outlook/[ Accessed 13 Aug 2018] Shinichi Saoshiro (17 August 2018) Dollar subdued as confidence returns focus on US-China trade talks Reuters [online] Retrieved from https://uk.reuters.com/article/us-globalforex/dollar-subdued-as-confidence-returns-focus-on-u-s-china-trade-talks-idUKKBN1L203G [Accessed 13 Aug 2018] Reuters (1 August 2018) Vietnam PM says to limit Dong devaluation at pct this year [online] Retrieved from https://www.reuters.com/article/vietnam-forex/vietnam-pm-saysto-limit-dong-devaluation-at-2-pct-this-year-idUSL4N1US539[Accessed 13 Aug 2018] Hardach, S (2018) Here's what you need to know about the US-China trade dispute [online] weforum.org Available at: https://www.weforum.org/agenda/2018/04/here-are-5facts-you-need-to-know-about-the-us-china-trade-dispute/ [Accessed 17 Aug 2018] MARLOW, I (2018) China passes Canada to become largest U.S trading partner [online] theglobeandmail.com Available at: https://www.theglobeandmail.com/report-onbusiness/international-business/asian-pacific-business/china-passes-canada-as-uss-largesttrading-partner/article27134249/ [Accessed 17 Aug 2018] Ming, C (2018) The dollar keeps rising against China's yuan That's set to continue [online] cnbc.com Available at: https://www.cnbc.com/2018/06/21/yuan-set-to-weaken-moreamid-us-china-trade-tensions-policy-divergence.html [Accessed 17 Aug 2018] s.cafef.vn (2015) Ngân hàng Thương mại cổ phâần Ngoại thương Việt Nam (HOSE) [online] Available at: http://s.cafef.vn/VCB-157505/von-hoa-122-nghin-ty-dong-vcb-tro-thanh-maanh-huong-lon-nhat-toi-vnindex.chn [Accessed 17 Aug 2018] Roberts, K (2018) Top 10 U.S Trade Partners In 2017 Can Be Broken Into Tiers [online] forbes.com Available at: https://www.forbes.com/sites/kenroberts/2018/02/28/top-10-u-strade-partners-in-2017-can-be-broken-into-three-tiers/#4075bb91627e [Accessed 17 Aug 2018] everycrsreport.com (2018) U.S-Vietnam Economic and Trade Relations: Key Issues in 2018 [online] Available at: https://www.everycrsreport.com/reports/R45172.html [Accessed 17 Aug 2018] Nhan Dan Online 2018, “Vietnam faces challenges in curbing inflation at 4% in 2018”, January 2018, Nhan Dan Online, viewed 20 May 2018, ... INTRODUCTION II ANALYSIS AND TRADING STRATEGIES FX MARKET PAST BEHAVIOR ANALYSIS FX MARKET ELEMENT ANALYSIS 2. 1 INFLATION RATE 2. 2 INTEREST RATE 2. 3 ECONOMIC GROWTH 2. 4 INTERNATIONAL SPECULATION 2. 5 FX EXPECTATION... against and CNY The report will include analysis of past performance of both currencies and the trading strategy for 20 19 II Analysis and trading strategies FX Market Past Behavior Analysis. .. Trading Position for VCB from September to November – 20 18 Month USD VND Rate USD/VND (4,000,000) 92, 788,000,000 23 ,197 3,000,000 (68,997,000,000) 22 ,999 1,000,000 (22 ,989,000,000) 22 ,989 8 02, 000,000