Jakarta. Rupiah strengthened against the US dollar on Wednesday, defying external pressures from renewed US tariff measures and lingering geopolitical tensions in the Middle East.

The local currency closed 29 points higher at Rp 16,800 per US dollar in the evening session, recovering from an earlier 5-point decline. The rupiah had previously ended at Rp 16,829.

The gain came as markets digested the United States’ move to impose a temporary 10% global import tariff starting Tuesday, with the Trump administration reportedly seeking to raise the rate to 15%.

The tariff action followed last week’s US Supreme Court ruling that annulled import duties previously enacted under emergency law, prompting Washington to reintroduce tariffs under alternative legal authority.

The rupiah also advanced despite heightened geopolitical tensions in the Middle East, which remain unresolved.

“Geopolitical tensions remain in focus, as Iran’s Deputy Foreign Minister stated that Tehran is ready to take necessary steps to reach an agreement with the US,” said Ibrahim Assuaibi, Director of Traze Andalan Futures, in a written statement on Wednesday.

The currency’s appreciation also occurred amid expectations that the Federal Reserve will keep interest rates unchanged.

Boston Federal Reserve President Susan Collins recently indicated that rates are likely to remain steady for some time, as the latest economic data show improvement in the labor market while inflation risks persist.

Meanwhile, Chicago Federal Reserve President Austin Goolsbee downplayed expectations of monetary easing, saying interest rates still need to be maintained as inflation remains above the Fed’s 2% mandate.

Add as a preferred source on Google +