JAKARTA - President Commissioner of HFX International Futures Sutopo Widodo said that the prospect of rupiah exchange rate movement was influenced by a number of main factors, both domestically and globally.
He conveyed globally that the weakening of the US dollar that occurred after the release of weak employment data in the United States provided space for Asian currencies, including the rupiah, to strengthen slightly.
However, he assessed that this positive sentiment was still overshadowed by uncertainty regarding the direction of the Fed's policy and the continued impact of the global trade war.
Sutopo explained that the combination of external and internal factors is currently the main driver of the rupiah.
He explained that from an external point of view, expectations for the Fed's reduction in interest rates are indeed quite strong, however, political dynamics in the US such as the dismissal of the Commissioner of the Bureau of Labor Statistics could trigger an increase in market volatility.
"On the other hand, the impact of Trump's tariff replies on global growth and inflation is also a major concern for investors," he told VOI, Monday, August 4.
Meanwhile, a factor from within the country, Sutopo said that although Indonesia's economic indicators show stability, the potential for capital outflows triggered by global uncertainty and the issue of global warming could put additional pressure on the rupiah.
"For today's description of the movement of the Rupiah, it is possible that the Rupiah will move in a limited range," he said.
Sutopo said the strengthening of the US dollar against key currencies on Monday, although limited, reflects that global risk sentiment is still high enough, thus limiting the potential for strengthening the rupiah, although the weakening space is also not too large.
"Market participants will continue to observe the latest developments, both from the US and from within the country, to make investment decisions," he said.
Technically, he said that the movement of the rupiah exchange rate today is expected to be in the limited range.
Sutopo conveyed that with a diverse background of sentiment, today's rupiah movement is expected to tend to sideways or experience a mild weakening. However, if there is positive sentiment from within the country or improvement in global sentiment, the rupiah has the opportunity to strengthen.
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"Therefore, market participants need to pay attention to the latest data from within and outside the country," he explained.
Sutopo said that taking into account all these factors, the Rupiah exchange rate is expected to move in the range of Rp. 16,350 to Rp. 16,450 per US dollar today.
He added that volatility will remain high along with market participants who are watching the latest developments.
"Rupiah may experience a mild weakening at the start of the trading session, but it can strengthen again if positive sentiment arises. Therefore, for market participants, it is advisable to remain careful and pay attention to every development," he said.
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