Jakarta. Rupiah strengthened against the US dollar on Tuesday as markets turned cautious ahead of the Federal Reserve’s policy meeting and amid renewed political and trade-related uncertainties in the United States.

The rupiah closed 14 points firmer at Rp 16,768 per USD, recovering after briefly weakening by as much as 20 points earlier in the session. The local currency had ended Monday at Rp 16,782 per $1.

Ibrahim Assuaibi, director of Traze Andalan Futures, said the rupiah’s rebound reflected investor focus on the outcome of the Federal Reserve’s policy meeting, which concludes on Wednesday.

“The market broadly expects the central bank to keep interest rates unchanged after three consecutive rate cuts in previous meetings,” Ibrahim said in a written statement on Tuesday.

He added that the rupiah also gained support from market concerns over the independence of the US central bank, following tensions between President Donald Trump and Fed Chair Jerome Powell.

“Investors are paying close attention to growing concerns about the Federal Reserve’s independence after the dispute between President Trump and Fed Chair Jerome Powell,” Ibrahim said.

Meanwhile, fears of another US government shutdown resurfaced after Democratic senators pledged to block a major funding bill, further weighing on global sentiment.

The rupiah remained in positive territory amid escalating US trade tensions, including tariff pressure on several European countries linked to a dispute over Greenland, higher tariffs on Canada, and Trump’s announcement that the US would raise tariffs on South Korean goods to 25%.

“The renewed escalation in US trade tariffs has added pressure on the dollar, which in turn provides room for emerging market currencies, including the rupiah, to strengthen,” Ibrahim said.