Jakarta. Rupiah weakened against the US dollar on Friday as geopolitical tensions in the Middle East and uncertainty over US trade policy weighed on market sentiment.
The rupiah closed 34 points lower at Rp 16,793 per dollar, compared with the previous close of Rp 16,759. During the session, the currency briefly weakened by as much as 35 points before slightly recovering by the afternoon close.
Ibrahim Assuaibi, director of Traze Andalan Futures, said the rupiah came under pressure following escalating geopolitical tensions between the United States and Iran this week.
Washington has deployed more military ships to the Middle East while pressuring Tehran to accept a nuclear agreement, raising concerns among global investors.
The rupiah also slipped into negative territory amid rising uncertainty surrounding US trade policy.
“This comes particularly after the US Supreme Court decision to cancel most of President Donald Trump’s trade tariffs. However, Trump responded by announcing new tariffs under a different legal framework and threatened to impose more import duties, keeping markets cautious about potential economic disruptions caused by these tariffs,” Ibrahim said in a written statement on Friday.
The currency also weakened as markets closely monitored signals from the Federal Reserve on the path of US interest rates.
“Markets broadly expect the central bank to keep interest rates unchanged at the March and April meetings. Meanwhile, a rate cut in June, which was previously considered the most likely timing for the Fed to resume monetary easing, now appears less certain,” Ibrahim said.
According to the CME FedWatch Tool, markets now see the July meeting as the most likely timing for a US rate cut, with a probability of about 66%.
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