The rupiah opened weaker against the US dollar on Tuesday, falling 0.14 percent to Rp17,920 per dollar at the start of trading. The move extended the previous session’s decline and continued a run of losses for the Indonesian currency.
Monday’s losses carry over
On Monday, the rupiah had opened 0.08 percent stronger at Rp17,860 per dollar, but it reversed course during the session and closed down 0.17 percent at Rp17,905. That close set the weaker base from which Tuesday’s trading began.
The US dollar index stood at 102,490 at 09:00 WIB on Tuesday, down 0.09 percent on the day. It had closed 0.37 percent higher in the previous session and remained near its strongest level since April of the previous year.
Dollar support and oil swings
Chris Weston, Head of Research at Pepperstone Group, said relatively higher US interest rates, stronger US growth, and rising demand for the dollar as a defensive asset continue to provide strong support for the greenback. Rising energy prices and US government bond yields have also strengthened the currency.
Brent crude rose 1.8 percent intraday on Monday before falling 0.9 percent in Asian trade on Tuesday morning, to $105.74 a barrel. Attacks on energy infrastructure in the Middle East and Ukraine, including Saudi Arabia, have raised geopolitical concerns, and persistently high energy prices could sustain global inflation pressure and keep US rates high for longer.
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