As the US dollar gains strength due to market expectations of additional interest rate hikes by the Federal Reserve, the USD/IDR ratio rises.
Markets are pricing in a nearly 85.5% chance of a Fed raise in December, according to the CME FedWatch tool.
As cautious traders await the June CPI data next week, the Indonesian Rupiah declines.
The USD/IDR is up for the third day in a row, trading at about 17,980 on Wednesday during Asian time. The pair gains value as the US dollar (USD) rises due to anticipations of additional Fed tightening.
The markets modified expectations for a more aggressive approach from the Federal Reserve (Fed), according to the CME FedWatch tool. Prior to last week's FOMC meeting, traders priced in a nearly 85.5% chance of a Fed raise in December, up from 61%.
The US S&P Global Composite Purchasing Managers' Index (PMI) increased to 52.2 in June, well surpassing the May reading of 51.5 and indicating robust corporate growth. With output rising to 55.7 from the previous month's 55.1, the US manufacturing sector demonstrated incredible resilience and easily exceeded projections of 54.8. Demand in the larger service economy is still quite sticky, as evidenced by the Services PMI's simultaneous printing of 51.3, which cleared the consensus expectation of 51.0 and increased from May's 50.7.
The uncertainty surrounding the US-Iran peace agreement also helps the Greenback. Iranian Foreign Minister Abbas Araghchi swiftly calmed expectations by emphasizing that meaningful nuclear negotiations have not actually started, despite US President Donald Trump's declaration that Iran had "fully and completely" agreed to open its facilities to nuclear inspections.
The key Strait of Hormuz would never revert to its pre-war state and will continue to be firmly under Iranian control, Iran's chief negotiator further warned. As Washington hosted a new round of negotiations between Israel and Lebanon to secure a ceasefire with Iran-backed Hezbollah, diplomatic efforts elsewhere appeared to be making headway.
Due to concerns that growing food prices will maintain inflationary pressures, traders are being cautious ahead of next week's June CPI data, which is putting pressure on the Indonesian Rupiah (IDR). This comes after annual inflation sharply increased from 2.42% in May to 3.08%. Major Japanese automakers may also move their production to Vietnam, endangering future foreign investment in Indonesian markets.
Markets are pricing in a nearly 85.5% chance of a Fed raise in December, according to the CME FedWatch tool.
As cautious traders await the June CPI data next week, the Indonesian Rupiah declines.
The USD/IDR is up for the third day in a row, trading at about 17,980 on Wednesday during Asian time. The pair gains value as the US dollar (USD) rises due to anticipations of additional Fed tightening.
The markets modified expectations for a more aggressive approach from the Federal Reserve (Fed), according to the CME FedWatch tool. Prior to last week's FOMC meeting, traders priced in a nearly 85.5% chance of a Fed raise in December, up from 61%.
The US S&P Global Composite Purchasing Managers' Index (PMI) increased to 52.2 in June, well surpassing the May reading of 51.5 and indicating robust corporate growth. With output rising to 55.7 from the previous month's 55.1, the US manufacturing sector demonstrated incredible resilience and easily exceeded projections of 54.8. Demand in the larger service economy is still quite sticky, as evidenced by the Services PMI's simultaneous printing of 51.3, which cleared the consensus expectation of 51.0 and increased from May's 50.7.
The uncertainty surrounding the US-Iran peace agreement also helps the Greenback. Iranian Foreign Minister Abbas Araghchi swiftly calmed expectations by emphasizing that meaningful nuclear negotiations have not actually started, despite US President Donald Trump's declaration that Iran had "fully and completely" agreed to open its facilities to nuclear inspections.
The key Strait of Hormuz would never revert to its pre-war state and will continue to be firmly under Iranian control, Iran's chief negotiator further warned. As Washington hosted a new round of negotiations between Israel and Lebanon to secure a ceasefire with Iran-backed Hezbollah, diplomatic efforts elsewhere appeared to be making headway.
Due to concerns that growing food prices will maintain inflationary pressures, traders are being cautious ahead of next week's June CPI data, which is putting pressure on the Indonesian Rupiah (IDR). This comes after annual inflation sharply increased from 2.42% in May to 3.08%. Major Japanese automakers may also move their production to Vietnam, endangering future foreign investment in Indonesian markets.
