Jakarta. Rupiah weakened again toward the end of the week on Friday as a mix of domestic and global pressures weighed on sentiment.

Indonesia’s currency closed down 34 points against the US dollar in afternoon trading, after earlier sliding as much as 55 points to Rp 16,876 from the previous close of Rp 16,842.

Ibrahim Assuaibi, director at Traze Andalan Futures, said the depreciation was driven by both internal and external factors.

Domestically, the rupiah came under pressure after Moody’s Ratings revised Indonesia’s sovereign outlook to negative from stable, even as the country’s credit rating was maintained at investment grade.

Externally, the currency weakened despite slightly easing tensions between the United States and Iran in the Middle East.

“Markets expect that talks between Tehran and Washington will help ease some tensions and prevent a broader war,” Ibrahim said in a written statement on Friday.

He added that US labor market data also influenced the rupiah. Challenger layoff figures showed companies cut jobs in January at the fastest pace since the 2009 global recession. Separate data pointed to a larger-than-expected rise in weekly jobless claims, while December job openings fell short of expectations.

The cooling labor market gives the Federal Reserve more room to cut interest rates, Ibrahim noted.

“However, markets are also uncertain about US monetary policy under the leadership of Kevin Warsh. The former Fed governor is viewed as a less dovish choice for the central bank’s top role,” he said.

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