jlk – The exchange rate of the Indonesian Rupiah against the US Dollar strengthened by 0.32% to reach the level of 15,654 per US Dollar at the closing of Friday’s trading (8/3).
This strengthening occurred amid the weakening of the US Dollar, triggered by dovish statements from the Chairman of the US Federal Reserve, Jerome Powell.
Powell stated that The Fed is gaining confidence in the necessary decrease in inflation to begin cutting interest rates.
However, he added that The Fed is still waiting to be more confident that inflation is moving down steadily to 2%.
“When we truly gain that confidence, and we’re not far from it, it is appropriate to begin reducing the rate of restraint so that we don’t push the economy into a recession,” Powell said, quoted from Reuters.
Powell’s statement provided a positive sentiment to risk assets, including the Rupiah.
However, money market analyst Lukman Leong predicts that the strengthening of the Rupiah will be limited as investors are still awaiting crucial nonfarm payrolls (NFP) data from the US to be released tonight.
NFP is data that measures the number of new jobs created in the US non-farm sector in a month.
This data is considered an important indicator for the health of the US economy and The Fed’s monetary policy.
“The US NFP data is expected to show an increase in the US labor market, with around 500,000 new jobs in March.
If this data matches or exceeds expectations, the US Dollar could strengthen again and put pressure on the Rupiah,” Lukman said to Katadata.co.id.
Lukman predicts that the Rupiah will move in the range of 15,600-15,700 per US Dollar.
Meanwhile, money market observer Ariston Tjendra believes that the Rupiah has the potential to strengthen again against the US Dollar today.
He stated that there is a potential for strengthening towards 15,580, with potential resistance around 15,680.
“The Rupiah still has support from the relatively stable domestic macroeconomic conditions.
In March, inflation was recorded at 0.66% on a monthly basis, in line with market expectations.
In addition, Indonesia’s foreign exchange reserves also increased to $138.8 billion at the end of February, indicating strong external resilience,” Ariston said.
On the other hand, several Asian currencies also showed strength against the US Dollar.
The Thai Baht strengthened by 0.03%, the Malaysian Ringgit strengthened by 0.34%, the Indian Rupee strengthened by 0.05%, the Philippine Peso strengthened by 0.06%, and the Japanese Yen strengthened by 0.06%. (ZM)