Jakarta. Rupiah strengthened at the start of the week on Monday, gaining ground against the US dollar as geopolitical tensions eased and markets awaited key economic data releases.

The local currency closed 71 points higher at Rp 16,805 per dollar in Monday’s afternoon trading, after briefly appreciating by as much as 80 points from the previous close of Rp 16,876.

Ibrahim Assuaibi, director of Traze Andalan Futures, said the rupiah’s advance followed easing tensions between the United States and Iran after both sides signaled that nuclear talks would continue.

“Concerns over potential conflict had led traders to assign a higher risk premium to oil,” Ibrahim said in a written statement on Monday.

The rupiah’s movement this week is also shaped by market focus on several major economic indicators from the world’s largest oil consumer.

In the United States, January nonfarm payroll data is scheduled for release on Wednesday, followed by the consumer price index reading on Friday.

“These data points will be closely monitored for further clues on interest rates, while markets are still assessing the monetary policy outlook under Kevin Warsh’s leadership at the Federal Reserve,” Ibrahim said.

Meanwhile, China is set to release its January CPI data on Friday, offering additional signals from the world’s largest oil importer. The release comes just ahead of the week-long Lunar New Year holiday, which is expected to boost fuel demand in the country.

Ibrahim said these developments are likely to influence the rupiah’s trajectory in the coming period.

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