Jakarta. Rupiah strengthened on Monday as improving domestic data and shifting expectations for US monetary policy pushed the dollar lower at the start of December.

The currency closed 12 points stronger at Rp 16,663 against the dollar, after briefly gaining 15 points from Friday’s close of Rp 16,675.

The move came after the Central Statistics Agency (BPS) reported a $2.39 billion trade surplus for October, marking 66 consecutive months of surplus since May 2020. The steady external balance helped anchor sentiment toward the rupiah at the month’s open.

Ibrahim Assuaibi, Director at Traze Andalan Futures, said the dollar began December on a weaker footing as global investors prepare for a pivotal month in US monetary policy.

“The dollar is softening as markets brace for what could be the Federal Reserve’s final rate cut of the year and confirmation of a dovish successor to Jerome Powell,” he said on Monday.

Markets now price an 87 percent probability that the Fed will cut rates by 25 basis points at next week’s meeting, according to CME FedWatch. Ibrahim added that shifting expectations for faster easing and reports that White House economic adviser Kevin Hassett is emerging as the leading candidate for Fed chair have pressured the greenback.

Last week, the dollar posted its worst weekly performance in four months as these expectations intensified. US Treasury Secretary Scott Bessent has said President Donald Trump is likely to announce his pick before Christmas.

The rupiah’s gains also came ahead of key U.S. data releases including November ISM Manufacturing PMI, expected to ease slightly to 48.6, as well as ISM Services, Industrial Production, ADP Employment, and Initial Jobless Claims.

Additional geopolitical pressure on the dollar emerged after Russian President Vladimir Putin declared the war in Ukraine would not end unless Kyiv withdraws from territories Moscow claims.