Rupiah Weakens Due To Solid US Economic Data

Money market observer Ariston Tjendra said solid US economic data could trigger the Federal Reserve (The Fed) to refrain from breaking interest rates, thus driving an increase in the US dollar and weakening the rupiah exchange rate.

"The opportunity for the weakening of the rupiah today is open to Rp. 16,250 with the potential for support in the range of Rp. 16,150," he said as quoted by ANTARA, Monday, January 13.

On Friday January 10, US Non Farm Payrolls (NFP) labor data in December 2024 was recorded at 256,000, more than the previous month which amounted to 212,000.

US unemployment rate data also decreased to 4.1 percent for December 2024 from 4.2 percent in the previous month.

"The solidity of labor data can trigger the Fed to refrain from cutting its benchmark interest rates again, so this expectation encourages an increase in the US dollar," said Ariston.

The release of the two economic data helped increase the US dollar index which is at a new high in the last two years, namely 109.96 on Friday (10/1) and 109.65 today.

According to him, good achievements from the US economy due to personal consumption spending in the country reached 68.24 percent or above the average of 64.32 percent.

The strong consumption in the US supports US economic growth, the economy is still running well. A good growing economy opens up more job opportunities," he said.

For this week, Ariston did not see any release of Indonesia's economic data. However, there will be a release of trade balance data today and Gross Domestic Product (GDP) in the fourth quarter on Friday, January 17 from China.

China's economic slowdown signal could also reduce the rupiah due to the large trade relationship between China and Indonesia, he said.

The rupiah exchange rate against the US dollar transacted between banks in Jakarta on Monday morning weakened 60 points or 0.37 percent to Rp16,250 per US dollar from the previous Rp16,190 per US dollar.