Vietnam is intensifying efforts to crack down on Chinese exporters trying to route products through the Southeast Asian nation to bypass higher U.S. tariffs, a customs official said.

Vietnam has become one of the top destinations for suppliers looking to avoid U.S. duties on Chinese products amid the trade war, making the country vulnerable to goods fraudulently labeled as “Made in Vietnam,” Au Anh Tuan, head of customs control and supervision in the General Department of Vietnam Customs, said in an interview in Hanoi.
“We’ve seen trade-fraud activities increase strongly since the trade war started,” he said. “We’ve increased cooperation with U.S. authorities to fight against that. We’re taking drastic steps, including compiling a list of 25 items to watch.”
Vietnam’s trade surplus with the U.S. reached nearly $40 billion in 2018. The gap hit almost $41 billion in the first nine months of 2019, up 29% on-year, according to U.S. Census Bureau data.
“They really need to step up their game in this area,” said Nestor Scherbey, a licensed U.S. customs broker and consultant based in Ho Chi Minh City. “They have no choice and they realize this. If they don’t pay attention to the country of origin of the goods being exported, they’re going to have trouble.”

U.S. Watchlist

In May, the U.S. Treasury Department added Vietnam to a watchlist of countries being monitored for possible currency manipulation. Asked in June if he wanted to impose tariffs on Vietnam, President Donald Trump described the country as “almost the single worst abuser of everybody.” Earlier this month, during a visit to Hanoi, Commerce Secretary Wilbur Ross urged Vietnam to reduce its trade surplus with the U.S.
The U.S. is Vietnam’s largest export market. Capital Economics Ltd. estimates that if Trump imposed 25% tariffs on imports from Vietnam as he did with Chinese goods, it would shave more than 1 percentage-point off the country’s growth rate — more than erasing the approximately 0.5 percentage-point gain Vietnam has seen this year as a beneficiary of the trade war.
Vietnamese officials say the country will buy more big-ticket items from the U.S., including Boeing Co. planes and liquefied natural gas, to help trim the surplus.

Special Scrutiny

Customs officials are focusing on “highly suspicious” sectors — such as electronic components and wooden furniture — that have seen annual exports surge by more than 15%, said Mai Xuan Thanh, deputy director general of the customs department. Hundreds of domestic and foreign companies are under “special scrutiny for suspect exports,” he said.
Beginning Dec. 27, Vietnam will suspend transshipment and temporary imports of plywood products headed to the U.S., a change that will remain in effect through 2024, Industry and Trade Minister Tran Tuan Anh said earlier this month. The National Steering Committee for Anti-Smuggling and Trade Fraud ordered provinces along the country’s borders to step up inspections of goods being imported.
Vietnamese customs last month said it discovered and seized about $4.3 billion of Chinese aluminum falsely labeled “Made in Vietnam” that was meant to be shipped overseas, mostly to the U.S.
“We’ve been putting a lot more resources toward preventing fraudulently labeled exports and illegal trans-shipments,” Tuan said. “This is really hard work given the ongoing trade war.”
Before it’s here, it’s on the Bloomberg Terminal.

By Nguyen Dieu Tu Uyen @ Bloomberg

Port congestion, rising land prices limit trade-war wins
Businesses says Vietnam may struggle to meet growing demand

Vietnam is finding it’s hard to win a trade war even when businesses are trying to hand you victories. Bloomberg reports.
The Southeast Asian growth engine has a young and growing middle class, a horde of free-trade agreements, and a booming manufacturing industry. Businesses from Alphabet Inc.’s Google to Crate & Barrel Holdings Inc. are lining up to invest in the country as supply chains migrate from neighboring China, which served as the world’s factory for the better part of two decades.
But Vietnam is starting to see expectations outrun reality. More and more businesses are complaining about congested ports and roads, rocketing costs for land and labor, and regulations that aren’t being loosened fast enough. Tapestry Inc., owner of the Coach and Kate Spade brands, has lamented insufficient infrastructure investment that’s left some containers stalled on the waters. Eclat Textile Co., a supplier to Nike Inc., says it needs to diversify beyond Vietnam, including to cheaper locations.
If Vietnam isn’t able to fast-track progress in closing its infrastructure gap, it risks losing its “mini-China” status that has drawn so many of Bain & Co.’s toy-supplier clients there since 2015, said Gerry Mattios, Bain’s Singapore-based vice president. Costs could outweigh the benefits, sending producers to the likes of Sri Lanka or Cambodia, he said.
For now, the money keeps rolling in. Total disbursed foreign direct investment rose 6.3% to $12 billion in the first eight months of the year from the same period in 2018, according to government figures, with the number of new registered projects surging 25% to 2,406.
Here’s what’s at stake across capacity categories as Vietnam tries to lock in those trade-war wins:

Port Congestion

Infrastructure is the big challenge for Vietnam, especially at its ports. China claims six of the top 10 ports by container traffic in the world — including Shanghai at No. 1 — while Vietnam’s two biggest ports, Ho Chi Minh Seaport and Cai Mep, rank No. 25 and No. 50, according to data compiled by Bloomberg Intelligence.
Operations Inside Tan Cang Hiep Phuoc Port
Containers at Tan Cang-Hiep Phuoc Port in Ho Chi Minh City.Photographer: Yen Duong/Bloomberg
Vietnam’s share of global container traffic was just 2.5% in 2017 versus 40% for China. Shipping container capacity will need to grow at almost twice its 10%-12% pace of the past decade, as well as fold in third-party logistics and freight-forwarding practices to keep up with new demand, BI research shows.

What Our Analysts Say

“President Donald Trump tweeting Vietnam as a candidate for a manufacturing shift from China would require a long, drawn-out process. Vietnam lacks maritime infrastructure, large container ports and a shipping network needed for rapid export-capacity growth. It’s unlikely to match China’s deeply entrenched trade apparatus for several years.”
The government estimates it would cost about 80-100 trillion dong ($3.44-$4.31 billion) to develop its ports. Big-figure deals — around new ports or revamping of old ones — have yet to come to fruition.
Congestion at the ports often means rising inventory costs and less diverse production lines that are limited to non time-sensitive goods, according to the BI analysis. What would help: massive investments for warehouses, seaports, rail terminals, and inland container depots, for starters. BI also recommends a national or quasi-national container shipping company in order to support large-scale cross-border trade.
Demand is certainly growing. More than 530 million tons of cargo were shipped through Vietnam seaports last year, up 20% from a year earlier, according to the Vietnam Maritime Administration’s website. The volume of exported goods handled rose 15% to 142.8 million tons. And 18.1 million TEU of containers were transported last year, up 26% from the previous year.
“With the current situation, Vietnam for sure cannot meet the demand of a wave of companies if they move in,” Tsai Wen Jui, chairman of Taiwan-based bicycle saddle manufacturer DDK Group, said in an interview at their Binh Duong office. Even if 5% of Taiwan’s companies in China relocated to Vietnam, the infrastructure would be overwhelmed, he said.
DDK Group has a joint venture with Warburg Pincus-backed Becamex IDC to manage a 200-acre section of the industrial park in Binh Duong province only for Taiwanese companies. While Tsai said he’s pleased with the quality of the roads inside the park, he bemoans the lack of a highway to deal with traffic that keeps getting more congested.

Property Prices

Land prices also are a constraint, said Tsai. The land costs in Bau Bang industrial park have doubled to $80 per square meter from three years ago. The price at some parks in Binh Duong province has increased to $150 per square meter from $65 in 2016, Tsai added.
It’s not just Binh Duong that’s seeing some property fever. Rental prices for industrial property rose by double digits year-on-year in the first half of 2019 for several provinces, including 54.6% in Binh Duong and 31.1% in Tay Ninh, northwest of Ho Chi Minh City. In Hai Duong, east of Hanoi, prices were up 29.4%, according to data compiled by real estate service provider Savills Plc. Occupancy in these areas has also soared, led by a 63.6% growth rate in Tay Ninh province, the data show.
Residential costs have increased in Hanoi and Ho Chi Minh City, with the former seeing a 20% price jump for condominiums in the second quarter from the previous year, and the latter experiencing a 4% jump on the primary market over the same period.
By Michelle Jamrisko and Xuan Quynh Nguyen @ Bloomberg

Donald Trump’s trade war with China aims to bring back manufacturing to the US. But in reality, could it be America’s once enemy, Vietnam, that could gain the most?

A string of companies are starting to shift production there from China to minimize the impact of the trade war after Washington imposed a fresh round of tariffs on an array of Chinese imports.
Last week, it emerged that Google could be moving production of its Pixel smartphone and smart speaker out of China to a former Nokia plant in Vietnam while Apple has also reportedly been considering similar steps.
And in 2018, GoerTek, a Chinese manufacturer of Apple’s Airpod headphones, announced that it was setting up shop elsewhere, it could be Vietnam.
According to Sophie Dao, Parter at GBS – a business & legal services company in Vietnam – which specialize in business incorporation services, more and more foreign investors start forming business present or factories in Vietnam. Within first quarters of this years, request from foreign investors to her firm increased over 220 percent.
But, the question is “Could Vietnam be the biggest winner from US-China trade war?”

Read full story on Telegraph

The ongoing trade war between U.S – China, the world’s two largest economies have also prompted Chinese investors to look to Southeast Asia, especially Vietnam, complicating its FDI scenario and threatening to impact its businesses.

Vietnam’s Lawmakers urged the Government to devise plans to deal with the possible ramifications of the escalating US-Iran tensions and US-China trade war and the influx of foreign direct investment into Vietnam at National Assembly meeting on May 22, 2019 to discuss a Government report on socio-economic development.
Citing a Ministry of Investment and Planning report which shows that in the first four months of this year, FDI from China increased 241 per cent year-on-year, Hoang Van Cuong, a house member from Hanoi, said the Government should have a clear orientation on approving investments.
Related: Company Registration in Vietnam
Given the increasing number of medium- and large-sized Vietnamese companies shutting down in recent times, the local private businesses might face stiff competition from foreign businesses and the Government’s policy to promote private sector would flounder, Cuong said.
More than half of the 16,000 registered FDI businesses in the report ostensibly made losses but continued to expand their business or plan to do so, highlighting the need for stricter oversight of the sector, he said.
Read more: How to set-up a Limited Liability Company in Vietnam as foreign investor
Pointing out that investments made by certain countries are even lower than those of local businesses, he questioned the need to attract FDI indiscriminately and called for prioritizing hi-tech industries and creating value chains involving both FDI and local businesses.
On the other hand, the Vietnamese private sector should find new drivers of growth by producing “global values” instead of relying on exploitation of natural resources or real estate, he said.
According to VNS, many National Assembly deputies also expressed doubts about achieving the Government’s inflation target, given the recent electricity price hike and uncertainties in the oil market as a result of the US-Iran tensions.

Companies operating in China are facing stiff increases in tariffs on exports to the United States as the trade war between the two countries escalates.

So, there’s an incentive for manufacturers in China to move their production to countries not subject to these tariffs.
And one of these beneficiary countries has been Vietnam, China’s increasingly business-friendly southern neighbour.
So what can we say about changing Chinese investment into Vietnam?
Related: Company Incorporation In Vietnam
The first thing to note is that foreign firms, including those from China, have long taken advantage of Vietnam’s cheaper labour and attractive business environment, well before the imposition of the first round of US sanctions last September.

Rising Chinese foreign direct investment into Vietnam @ BBC

Vietnam’s success story

Vietnam’s economy has grown rapidly in the past decade.
Its manufacturing industry has done particularly well, with multinationals like IKEA, for instance, bolstering operations there.

And while the growth of industry is a long-term trend, experts say there’s growing evidence that an increasingly stringent US tariff regime on Chinese goods is driving further investment into Vietnam.
“Many companies were investing in production outside of China, particularly in South East Asia, before the current trade conflict”, according to corporate law firm, Baker & McKenzie, based in Hong Kong, but “the recent trade friction has simply accelerated this evolution.”
There are, however, clear signs that the pressures of rapid growth in Vietnam are taking their toll.
There were just over 14.5 million people in 2018 working in industry in Vietnam, according to the International Labour Organization.
That compares with more than 200 million in China.

Average monthly pay ($)

Sanctions against Vietnam?

For firms moving all or part of their supply chains from China to Vietnam to avoid US sanctions, there is a risk that the US could take action against Vietnam as well.
Some multinationals are taking on a “China plus one” approach – firms keeping a foothold in China while also operating in a low-wage economy elsewhere in Asia.
The US administration is aware of the shift into production operations outside China as a way to avoid sanctions.
President Trump recently tweeted: “Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. That’s why China wants to make a deal so badly!”
In the escalating trade war between the United States and China, the label “Made in Vietnam” may not in the future be enough to avoid US tariffs.

By Reality Check team, BBC News

Trump tariffs seal the deal for companies looking to quit China
US President Donald Trump’s new tariffs are helping to erode China’s appeal as a place where stuff gets made.

According to a report on Bloomberg, Ricoh Co is moving some manufacturing from China to Thailand to avoid potential risks from the US-China trade tensions, the Japanese office-equipment maker said on Thursday (May 16). That came hours after a report that Taiwan’s Kenda Rubber Industrial is investing in Vietnam to do the same.
Those two examples are just the most recent from a chorus of executives who are citing the trade war as the final straw in their shift out of China, with margins already squeezed by rising labor costs, tougher environmental standards and domestic competition. Last week, Trump hiked tariffs on US$200 billion of Chinese imports and the US is readying the expansion of that treatment to the remainder.
“The purpose is to minimize the impact of tariff increases,” Ricoh said in a statement, referring to the newly announced US tariffs on the rest of imports from China. The firm will produce all US-bound multi-function printers in Thailand instead of Shenzhen in southern China.
The company said it will consider various changes to its production structure including moving more production to Thailand from China, to “respond to various risks and improve efficiency”, it said.
Big consumer brands Samsonite International SA, Macy’s Inc and Fossil Group Inc have all said on recent calls with analysts that they are continuing to move production and sourcing out of China. Bloomberg reports.
“We’re generally under an initiative to kind of shift what we can from China, which we were doing even ahead of tariffs,” Samsonite CEO Kyle Gendreau said on a call on Tuesday. “And we’re just continuing to accelerate on the mix of what’s coming from China to kind of mitigate the impacts there as well.”
The threatened tariffs of 25 per cent on all exports to the US, which accounts for a fifth of China’s total outbound shipments, are set to give China the stiffest test of its role as the core of the global supply chain. For Cisco Systems Inc, shipping from other nations is the way to go.
“We still have some manufacturing happening in China, but we have greatly, greatly reduced our exposure working with our supply chain and our suppliers,” chief financial officer Kelly A. Kramer said on a call with analysts on Wednesday, when asked about the impact of the tariffs. “So the impact that we’re expecting, again we are trying to mitigate.”
Some businesses have already moved following last year’s tariffs on the first batch of Chinese products. Communication equipment producer Sierra Wireless Inc has almost completed moving some production to Vietnam, and that has reduced the firm’s exposure to further trade flaring, CFO David McLennan said on May 9.
UBS Group found in a November survey that around 37 per cent of 200 export manufacturers said they had transferred production in the past year, while another 33 per cent plan to do so in the next six to 12 months. That relocation comes at a cost for companies such as aluminum producer Granges AB, which had to move production out of its most cost-efficient facility in China to a plant in Sweden.
Even Chinese firms are moving to dodge the tariffs. China-based Jason Furniture (Hangzhou) Co revealed plans to build factories overseas in its annual report last month, and Xilinmen Furniture Co started to build a production base in Thailand.
While Chinese exporters reel at the escalating tensions, other countries and businesses are extending invitations to those driven out of the Asian nation.
If the trade war between the US and China continues it opens “a door for South America to occupy this space”, Fernando Queiroz, chief executive officer of the Sao Paulo-based meat producer Minerva SA, said on a Wednesday call.

Rising land and labour costs, bottlenecks at ports, traffic jams on roads and diminishing manufacturing capacity are leading to saturation in parts of Vietnam
Other parts of Asia, including Malaysia and Batam in Indonesia, emerge as alternative manufacturing hubs to Vietnam

Koh, executive director of Singaporean furniture manufacturer Koda, runs plants in Malaysia and Vietnam, and while he is fully committed to his Vietnamese investments, he is now worried that parts of the country are struggling to cope with the influx of companies, many of which are looking to escape trade war tariffs. Cissy Zhou, Finbarr Bermingham reported on SCMP.
“Everywhere, there are buildings going up. The roads are more crowded, the traffic jams are getting worse,” Koh said. “There has been a big difference in port congestion in the last two years. Nowadays, we have to book space on a ship two weeks in advance. We did not have to do this before.”
Vietnam’s economy grew by 7.1 per cent last year compared to 6.8 per cent, while it has attracted a plethora of multinational companies, including Intel, Samsung and LG, all of which have made huge investments.
Fred Burke, managing partner of law firm Baker McKenzie’s Vietnam office, noticed a flood of Chinese manufacturers into Vietnam even before the trade war.
“There is just all kinds of people coming in. There’s a few coming in and saying that they’re being hammered by the import duties in the US on Chinese exports. So people making things like emergency exit signs, brake cables, all kinds of specific items that are being cost-plus manufactured in China,” Burke said.
However, while China’s main industrial hubs have become known for high quality manufacturing and top-class infrastructure, Vietnam is a less mature prospect.
“The Vietnamese workers were really not trained up to the level that the Chinese are, and that starts with the construction of your factory, or the road to get there. China has got so good at infrastructure, some people just take it for granted that everywhere there’s these eight lane roads with high-speed rail and everything. But in Vietnam, they’re just starting to build all that stuff. They have their first [underground train] lines coming online in the next year or two in Ho Chi Minh City,” Burke said.
The exodus of firms out of China has been predicted to continue, especially as US President Donald Trump prepares to take the trade war to the next level.
But with rising costs of land and labour, bottlenecks at the ports, traffic jams on the roads and quickly diminishing manufacturing capacity, experts are warning that those who have yet to make the leap to Vietnam may have already missed the boat.
“Last year, there were several manufacturers trying to relocate to Vietnam to offset the trade war impact,” said Kong Xiangping, general manager at the Ho Chi Minh branch of Ever Win Service Group, a Taiwanese consulting firm.
“The land price back then was around US$60 per square metre (11 sq ft). Those companies decided not to relocate to Vietnam because they thought the trade war risk had eased. They must be regretting their decision now because the land price has drastically gone up to over US$100 this year. Previously, it only went up by US$5 to US$10 per square metre each year.”
Vietnam is roughly the same size of China’s Guangdong province, and while China’s southerly manufacturing base has a population of 104.3 million, Vietnam’s is 95.5 million. But while Guangdong can draw on massive pools of migrant workers from around the rest of China, Vietnam cannot.
According to an official Vietnamese government database, there were 9.3 million workers in the country’s manufacturing sector in 2017.
Comparably, Guangdong province alone had a manufacturing workforce of 12.71 million in September 2018, accounting for 58 per cent of the total workforce, according to the Guangdong Statistics Bureau. Guangdong is China’s most populous province, while 10 other provinces have populations greater than 50 million people.
It means that companies that have already set up in Vietnam have already picked up the skilled staff, with high turnover rates and poaching of talent a cause of anxiety for many in the country, limiting the possibility that Vietnam can be “the new China”, or even “the new Guangdong”.
Wilkie Wong is a managing director at the world’s largest woven shirt maker, Esquel Group, which makes about 100 million shirts annually. The company is Chinese, but has had presence in Vietnam for 15 years.
“In the past we used to have workers striking in Vietnam, but we haven’t had that problem for many years. That is because we have improved the way we work with the workers to help them improve productivity, thereby allowing them to earn more,” Wong said. “At one of our factories, we have people lining up in front of our gate every day trying to look for a job. I mean, that is due to word of mouth. So if we can become an employer of choice, then we can mitigate some of the problems in Vietnam.”

For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….

— Donald J. Trump (@realDonaldTrump) May 5, 2019

According to SCMP, Some Chinese manufacturers, though, have struggled to recruit those with requisite language skills in Vietnam, particularly in and around the industrial hub of Ho Chi Minh City, the country’s largest metropolis.
“Chinese manufacturers have been increasing investment in Vietnam in recent years, but there is a shortage of Chinese speakers,” said Zhang Diansheng, general manager at Ho Chi Minh-based Hang Sinh Consultant Company. “It is getting more difficult to recruit workers around Ho Chi Minh City. Factories even fight against each other for more workers. It’s easier to find more labour in remote areas, but workers are less professional in less developed cities.”
This has driven companies farther out of the traditional manufacturing hubs to more remote parts of Vietnam, where the infrastructure is less developed. It has also led companies to look at alternative locations around Southeast Asia.
Among them is Malaysia – a fellow signatory to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which offers preferential access to markets such as Australia, Canada, Japan and Mexico – and Indonesia, where multinational companies have been setting up manufacturing bases in the free-trade zone of Batam, a small island an hour’s ferry journey from Singapore.
Last year, it was announced that the Taiwanese iPhone assembly company Pegatron was shifting production away from China to Batam, as a means of avoiding US tariffs. The plant was due to begin manufacturing in April. Appliance manufacturer Phillips also has a large plant on the island, producing shavers and irons, among other products.
Angelia Chew, founder of the Singapore-based consultancy AC Trade Advisory, said that Vietnam and Batam are the jurisdictions attracting most interest from her clients.
“Batam is one of the most successful trade zones in Indonesia because of the proximity to Singapore,” she said, adding that despite the concerns over capacity and infrastructure, she is still bullish on Vietnam. “The advantage is that Vietnam has the free trade agreement with the European Union and the CPTPP. Now I’m seeing a lot of Chinese investments going into Vietnam as well. So if you’re looking to move in the near future, that is still the best bet.”
Anyway, if you planned to start your business in Vietnam by forming a foreign invested company or acquire an existing enterprise, you may contact GBS, a business and legal services company in Vietnam, which is the most preferred by foreign investors at info@gbs.com.vn or visit https://gbs.com.vn

Vietnam could be scooping up factory and trade opportunities from the US-China trade war, one supply chain research analyst believes.

Chris Rogers, an analyst at S&P Global Market Intelligence, pointed to the divergence in export figures from both Vietnam and its giant neighbor, China, for the first two months of 2019.
Seaborne Vietnamese exports to the United States jumped by 17.3 per cent in January and February altogether, even as Chinese shipments to the US fell by 4.9 per cent in the same period, he noted. This was even as overall exports out of Vietnam rose by 0.1 per cent on the year before.
“As business uncertainties mount regarding the long-term trade relations between China and the United States companies are increasingly considering alternative supply chain options,” Mr Rogers wrote in an analysis of the export data. “Vietnam has been one of the longer-term destinations for manufacturers shifting out of China.”
He hewed to the market view that the US-China trade war, while not the sole factor, sped up many businesses’ flight out of China when it came to production operations.
A good chunk of the export growth came from furniture shipments – up by 25.3 per cent year on year – while shipments of capital goods grew by 16.1 per cent. These are both product segments where Chinese exports to the US have been hit by duties, Mr Rogers noted.
But he added that “it’s not just about tariffs”.
Clothes exports were also up by 14.6 per cent, despite Vietnam’s shift from labour-intensive and low-value manufacturing to higher-value goods over the past decade, said Mr Rogers, who covers global trade policy, logistics and industrial supply chains for S&P’s Panjiva research unit.
 

ASEANBUSINESS STAFF | btnews@sph.com.sg | @AseanBusinessSG

Both major economic and political events, including US-China trade negotiations and Brexit agreements, are being considered for extension. This seems to have a positive impact on the financial market around the world, especially in China, as well as on the movement of the British pound. The final results of both events will likely to be at the end of May 2019

Specifically, the US president, Donald Trump, recently expressed optimism about the process of trade negotiations with China around key issues and has delayed raising tarrifs on US$200 bn of Chinese goods. The tax increase period is initially scheduled for March 1, 2019 and may be extended for another 60 days. The movement shows the White House’s commitment to achieving a “fair” trade agreement instead of falling deep into the trade war. However, it is clear that the time for negotiation between the two parties is quite short in order to reach a comprehensive agreement. Therefore, we suppose that a high chance of a soft agreement through the signing of a memorandum of understanding (MOU) with a focus on trade, requesting China to stop intervene its currency, improving intellectual property protection, and opening the market to foreign investors.
Meanwhile, the government of the British Prime Minister, Theresa May, and the National Assembly seem to have not found an agreement in the negotiation process with the EU. Currently, observers mention many different scenarios in which the worst scenario is associated with the case of Britain leaving the EU without any agreement. However, we think a high chance that the UK will activate Article 50 to delay Brexit for another two months. The deadline will be May 23, 2019. The British pound has rebounded strongly in recent sessions because the concerns about a no-deal Brexit softened. Currently, the British pound and Euro are the main currencies to keep the USD around 96 points.
In our opinion, the negative news related to the Brexit and the European economy has been reflected and pushed the Euro to near the historical bottom. Therefore, positive news will boost EURUSD and GBPUSD exchange rates, meaning that the US Dollar will decrease in the foreign exchange market. For emerging and developing countries (EMDEs) trading and borrowing US Dollar, exchange rate pressure will ease.