Rupiah projected to be stable following Fed Chair’s statement

The rupiah’s exchange rate to the US dollar traded at the Jakarta interbank market on Wednesday morning is projected to be stable following The Federal Reserve Governor Jerome Powell’s comments last night.

The Indonesian currency opened two points higher, or 0.01 percent, at Rp14,409 per US dollar, from Rp14,407 during the previous trade’s closure.

“Increase of the dollar index and the fall in treasury yields will potentially lift the rupiah up to its stable position. The Brent crude price dipped six percent following growing concerns on renewed lockdown in Germany. This condition will make the rupiah stable today,” Samuel Security Analyst Ahmad Mikail remarked here on Wednesday.

Mikail projected the dollar index to possibly strengthen to 92.5 today over rising concerns on a renewed lockdown in Germany and weakening euro to the US dollar. Moreover, COVID-19 daily cases are rising in Europe on account of limited vaccines.

Meanwhile, the yield on the 10-year US treasury note will potentially nosedive to 1.58 percent. Similarly, the US bond yield will decrease over rising concerns on escalating number of COVID-19 cases in Europe despite its efforts to bring about an economic recovery.

The US bond yield is currently stable at 1.6 percent, although it tended to slide after increasing over 1.7 percent, he noted.

The statements of Powell and US Finance Minister Janet Yellen at the US House Committee on Financial Services last night drove the rise of US bond yields, Mikail pointed out.

Powell stated that economic recovery in the US was already on the right track, though recovery of economic sectors impacted by COVID-19 was far from complete in addition to the persistently high number of unemployed.

“Powell’s statements pulled through the increase of US treasury,” Mikail remarked.

The rupiah’s exchange to the US dollar at the Jakarta Interbank Spot Dollar Rate (JISDOR) is projected to be stable to Rp14,400 per US dollar.

On last Tuesday (March 23), the rupiah closed 10 points higher, or 0.07 percent, to Rp14,397 per US dollar as compared to Rp14,407 per US dollar at the previous trade’s closure.

 

Source: Antara News

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