JAKARTA - The rupiah exchange rate in trading Tuesday, July 1, is expected to move higher against the United States (US) dollar.
To note, citing Bloomberg, on Monday, June 30, the rupiah spot exchange closed down 0.27 percent to the level of Rp. 16,238 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed slightly higher by 0.01 percent to a price level of Rp. 16,231 per US dollar.
Currency observer Ibrahim Assuaibi said that the US and China had officially signed a trade agreement, which effectively ended the ongoing trade war.
"Meanwhile, the US-UK trade agreement comes into force Monday, cutting car fares by 10 percent and completely removing aircraft parts import duties," he said in his statement, quoted Tuesday, July 1.
Even so, he said that the July 9 deadline is close to the possibility of reimposing import duties on other trading partners, and for global steel and aluminum tariffs.
Ibrahim conveyed that regarding geopolitical matters, Iran has shown signs of flexibility, leaning towards diplomacy, as its UN representatives say that Tehran is open to forming a regional nuclear consortium in the event of an agreement with Washington that adds to market optimism is likely to end the Israeli-Gaza war within two weeks.
In addition, the Federal Reserve (Fed) option inflation gauge, the core Consumption Price Index (PCE) in May was released in line with estimates.
The core PCE in May rose by 2.7 percent (YoY), or higher than April's estimated and data.
Ibrahim said the focus of the market this week is U.S. main employment data which will be released on Thursday.
Meanwhile, from within the country, Ibrahim said that the inflation rate in Indonesia in June 2025 is expected to be in the range of 2.2 percent (YoY). This was estimated by ING Bank NV, which is based in Amsterdam, in a report entitled Asia week ahead: data to show uptick inflation in South Korea and Indonesia.
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Meanwhile, the report states that inflation is expected to occur in a number of Asian countries including Indonesia, the Philippines, and South Korea, which among other things are driven by higher oil prices.
Ibrahim explained that in Indonesia, the contribution of the transportation sector to core inflation has fallen and has approached zero in the last two months, with rising global oil prices, the sector's contribution will be significant again for price increases.
Based on records, the consumer price index in May 2025 experienced inflation of 1.6 percent YoY, lower than April which was 1.95 percent and from the estimated majority of economists who previously predicted it to be 1.87 percent, and inflation was also lower than the achievement in May 2024 which reached 2.84 percent.
Ibrahim estimates that the rupiah will fluctuate but close higher in trading Tuesday, July 1, 2025 in the price range of IDR 16,170 - IDR 16,240 per US dollar.
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