Ahead Of Indonesia's Second Quarter GDP Release, Rupiah Becomes The Strongest In Asia Pacific

Illustrated. (Irfan Meidianto / VOI)

JAKARTA - The rupiah exchange rate on the spot market opened stronger on Wednesday, August 5 trading. The rupiah was able to shoot up 85 points or 0.59 percent to the level of IDR 14,540 per United States dollar (US).

Monex Investindo Futures Head of Research, Ariston Tjendra, said that this morning emerging market currencies seemed to be strengthening against the US dollar.

"This strengthening is likely supported by the prospect of further US government stimulus approval worth 1 trillion US dollars to restore the US economy affected by the pandemic," Ariston told VOI.

According to him, a large stimulus gave positive sentiment to risk assets because the stimulus had a positive impact on the economy.

"Apart from that, a large stimulus can also suppress the exchange rate of the country concerned because of the potential for large amounts of money in circulation," he explained.

The rupiah, said Ariston, has the potential to strengthen following this sentiment with a potential range of IDR 14,500-14,700 per US dollar.

Today, Indonesia will release data on Gross Domestic Product (GDP) for the second quarter of 2020. This data might put pressure on the rupiah if the results are below market expectations.

This morning, the majority of currencies in the Asia Pacific region moved higher against the US dollar, led by the rupiah. Followed by the Taiwan dollar which strengthened 0.32 percent.

Then the South Korean won and Malaysian ringgit rose 0.27 percent and 0.24 percent, respectively. Followed by the Japanese yen which has appreciated 0.13 percent.

The Singapore dollar is seen strengthening 0.08 percent. The Philippine peso and Thai baht both gained 0.06 percent.

Meanwhile, the Indian rupee was the only one to weaken, slipping slightly by 0.05 percent against the US dollar. Then the Hong Kong dollar looked stagnant.