Friday's Rupiah Has The Potential To End Up Strengthening, Resulting In US Bond Yields

Illustration. (Photo: Doc. Antara)

JAKARTA - The rupiah exchange rate on Friday has the potential to strengthen, overshadowed by an increase in yield on US bonds.

At 11.20 WIB, the rupiah had weakened 7 points or 0.05 percent to the position of Rp14,295 per US dollar compared to the position at the previous closing trade of Rp14,288 per US dollar.

"The momentum for the strengthening of the rupiah may continue today with the positive market sentiment towards risky assets this morning following the improvement in US employment data released last night," said money market observer Ariston Tjendra in Jakarta, quoted from Antara, Friday, May 28.

US weekly jobless benefits claims data released 406,000 claims, lower than the expectation of 427,000 claims which means the number of unemployed is reduced. This figure is the lowest throughout the pandemic.

But on the other hand, continued Ariston, the market will be wary of an increase in the yield on the 10-year US government bond that moves back above 1.6 percent.

"The increase in yield is in line with expectations of economic recovery in the US. The increase in yield could trigger a strengthening of the US dollar against other exchange rates," said Ariston.

Ariston said the rupiah today has the potential to further strengthen to the range of Rp14,230 per US dollar with potential resistance in the range of Rp14,300 per US dollar.

On Thursday, May 27 yesterday, the rupiah closed up 40 points or 0.28 percent to Rp14,288 per US dollar compared to the position at the previous close of trade at Rp14,328 per US dollar.