Rupiah Edges Closer to 18,000 as Iran Talks Keep Markets on Edge
Jakarta. Rupiah extended its losses on Friday, sliding closer to the Rp 18,000-per-dollar mark as investors weighed mixed signals from US-Iran peace negotiations and lingering geopolitical risks in the Middle East.
The rupiah closed at Rp 17,963 per US dollar, down 34 points from the previous close of Rp 17,929.
Ibrahim Assuaibi, director of Traze Andalan Futures, said investors remained focused on negotiations between Washington and Tehran after US President Donald Trump expressed optimism over the talks.
"Investors continue to monitor negotiations between Washington and Tehran after President Donald Trump said he believes Iran has 'agreed to almost everything we need,' signaling confidence that discussions are moving in the right direction," Ibrahim said in a statement on Friday.
However, the The Wall Street Journal reported that Iran had rejected a proposal to relinquish its claim over the Strait of Hormuz in exchange for the release of billions of dollars in frozen Iranian assets.
"The mixed signals have kept geopolitical risks on traders' radar, even as concerns over a direct disruption to Gulf crude oil supplies continue to ease," Ibrahim said.
The rupiah also came under pressure as markets monitored crude oil flows from the Gulf and looked for fresh direction in oil prices following the US holiday weekend, amid signs of recovering demand.
On the economic front, the US labor market added just 57,000 jobs in June, according to the US Bureau of Labor Statistics, well below market expectations of 110,000. May's payroll figure was also revised down to 129,000 from the previously reported 172,000.
"The weaker-than-expected nonfarm payrolls data has eased expectations of tighter monetary policy from the Federal Reserve. According to the CME FedWatch Tool, the probability of a rate hike in September fell to 51% from 63% before the data release," Ibrahim said.
According to Bloomberg data as of 3:59 p.m. Jakarta time, the rupiah traded at Rp 13,919 per Singapore dollar, Rp 111.55 per Japanese yen, Rp 12,467 per Australian dollar, and Rp 20,573 per euro.
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