Jakarta. Rupiah weakened 0.54% to Rp 17,858 per US dollar on Thursday morning as investors flocked to the greenback after the Federal Reserve kept interest rates unchanged and markets increased bets on future tightening.

Bloomberg data showed the rupiah weakened 96 points, or 0.54%, to Rp 17,858 per US dollar in spot trading as of 9:05 a.m. Jakarta time. The US dollar index gained 0.17% to 100.26.

The local currency had already closed 39 points lower at Rp 17,764 per US dollar on Wednesday.

The dollar remained near a more than two-month high after markets increased bets on further policy tightening by the Federal Reserve. The US central bank, under new Chair Kevin Warsh, kept its benchmark interest rate unchanged at 3.50%-3.75% at its latest meeting.

According to CNBC International, the US dollar index was little changed at 100.31 on Thursday after surging 0.85% in the previous session to its strongest level since March 31.

Gavin Friend, a senior market strategist at NAB, said in a podcast that the US dollar had posted substantial gains and would likely take time to retrace those advances.

Elsewhere, the euro edged up to $1.1511, while the British pound strengthened to $1.3318 after earlier touching a two-month low.

The Australian and New Zealand dollars both gained around 0.2% to $0.7025 and $0.5780, respectively.

Meanwhile, the Japanese yen weakened to 160.76 per US dollar after hitting its lowest level since 2024 overnight, hovering near the 160 threshold that markets widely view as a trigger point for potential intervention by Japanese authorities.

Bloomberg data as of 10:24 a.m. EDT showed the Singapore dollar traded at Rp 13,872, the Japanese yen at Rp 111.2, the Australian dollar at Rp 12,555, and the euro at Rp 20,561 against the rupiah.