Jakarta. Rupiah slipped back into negative territory on Tuesday, closing slightly weaker against the US dollar amid escalating geopolitical tensions in the Middle East and hawkish signals from the Federal Reserve.

The local currency ended the afternoon session down 4 points at Rp 16,872 per US dollar, after briefly strengthening 10 points from its previous close of Rp 16,868.

Ibrahim Assuaibi, Director of Traze Andalan Futures, said the rupiah remained under pressure following the outbreak of conflict involving the United States, Israel, and Iran over the weekend.

The tensions widened after Israel launched attacks on Lebanon, while Iran reportedly targeted energy infrastructure in Gulf countries and oil tankers in the Strait of Hormuz.

“Oil tankers and container ships are also avoiding the waterway as insurance companies have withdrawn coverage, while global oil and gas shipping rates have surged,” Ibrahim said in a written statement on Tuesday.

Around 20% of the world’s oil and gas supply passes through the Strait of Hormuz, making the route a critical artery for global energy trade.

The rupiah also faced headwinds from market attention toward remarks by several Federal Reserve officials.

“More aggressive statements from Fed officials could strengthen the US dollar,” Ibrahim said.

He added that investors are closely watching US labor market data this week, including the ADP Employment Change and the Nonfarm Payrolls report, which could shape expectations for the Fed’s monetary policy path.

“Recent economic data show inflation remains elevated, prompting traders to scale back bets on near-term monetary easing,” he said.

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