Vietnamese Currency is expected to Rise as the US Keeps Importing more from the Region
As of now, the countries with the top and the second-largest economies are the United States and China. However, it does not mean that other countries are not competing with them.
The rise in a country’s economy means that its currency also gets strengthened versus the countries whose economies are weaker.
How the US Boosted the Chinese Economy
There was a time when although the United States had the strongest economy but China was not the second-strongest.
All major tech, financial, and other companies were based in the United States. However, as the competition began around the world, United States-based companies had to find ways to lower their expenses.
Among all the expenses, the largest expense is easily the labor cost. Therefore, the majority of the companies from the United States started importing supplies from China due to cheap labor.
This in turn helped the Chinese economy and the country has worked on all of its sectors, and has built a strong infrastructure. China now ranks as the second-largest economy in the world and its currency is also strong as observed at the forex exchange markets.
The US No Longer has Strong Relations with China
Over time, China has continued challenging the United States in many sectors. The US has continued drifting away from China due to geopolitical quarrels.
Therefore, the US has pulled the majority of its import from China moving it to Vietnam. Now, Vietnam is becoming the next country that is gaining a lot of strength in its economy due to exports to the US.
Nike alone has Vietnam produce 51% of its overall products and a similar is being observed for other US-based companies.
The lifestyle in the country is changing and its economy is also growing stronger. In recent years, the US has continued increasing its imports from Vietnam, and it is now close to hitting $100 billion on an annual basis.
This is a positive sign for the Vietnamese dong as its value is gaining strength versus other currencies. Now, the forex brokers are finding the dong to be very attractive and soon, its value would rise significantly in the forex markets.