A statement from Steven Mnuchin pushed IDR back a bit. (Image via Market Bisnis)

IDR weakens to Rp13,685/USD amid U.S statement before Phase One

On Wednesday’s foreign exchange (forex) spot market opening, the Indonesian Rupiah is seen at Rp13,685 against the U.S Dollar (USD). The rate weakened slightly by 0.04 percent compared to Tuesday’s closing rate at Rp13,680/USD. For today, IDR is moving around Rp13,600 - Rp13,700/USD.

Today, the majority of currencies in Asia – ASEAN regions weakened against the USD. Reportedly, S. Korean Won (KRW) weakened by 0.38 percent, Malaysian Ringgit (MYR) by 0.26 percent, and Singaporean Dollar (SGD) by 0.06 percent.

Weakening also occurred to Philippines Peso (PHP) by 0.13 percent. Both the Hong Kong Dollar (HKD) and New Taiwan Dollar (TWD) weakened by 0.01 and 0.02 percent respectively against the USD.

Strengthening only happened to Japanese Yen (JPY) by 0.08 percent, Chinese Yuan (RMB) by 0.12 percent, Turkish Lira (TRY) by 0.04 percent, and Thai Baht (THB) slightly strengthened by 0.01 percent against the USD.

The majority of currencies in the developed country regions also weakened against the USD. Australian Dollar (AUD) and Canadian Dollar (CAD) both weakened by 0.07 and 0.03 percent respectively. Only European Union (EUR) strengthened by 0.03 percent against the USD.

Meanwhile, the Great Britain Pound sterling (GBP) remains stagnant against the USD.

The weakening of IDR is caused by the negative sentiment in the trade agreement between the United States (U.S) and China. The market grew worried after the statement from the U.S Secretary of Treasury, Steven Mnuchin, that Chinese import tariffs will not be erased until the agreement for Phase Two, reportedly to be held after the U.S Presidential Election in 2020.

The other negative sentiment came from Indonesia’s trade balance that showed US$470 million deficits. If the deficit is greater than the consensus, it might halt IDR’s growth.

Source: https://bit.ly/2FPLAxN