Jakarta. Rupiah edged higher against the US dollar on Thursday after easing tensions over the Strait of Hormuz improved global risk sentiment, while softer US private hiring data reinforced expectations that the Federal Reserve may refrain from further monetary tightening.

The Indonesian currency closed up 10 points, or 0.06%, at Rp 17,923 per US dollar, from Rp 17,933 in the previous session.

Ibrahim Assuaibi, director of Traze Andalan Futures and a currency analyst, said the rupiah gained after Iran announced it had reached an agreement with Oman on traffic through the Strait of Hormuz, a critical shipping route that carries about one-fifth of the world's energy supply.

"The prospect of increased tanker traffic through the Strait of Hormuz has eased concerns over prolonged supply disruptions that had driven a sharp rise in oil prices in recent weeks," Ibrahim said on Thursday.

"Lower energy prices have prompted investors to scale back expectations for further tightening by the Federal Reserve," he added.

The rupiah also drew support from the latest US ADP National Employment Report, which showed private-sector hiring slowed in July, shifting market focus to the upcoming US nonfarm payrolls report for further clues on the Fed's policy path.

Domestically, sentiment remained supported after Indonesia reported annual economic growth of 5.29% in the second quarter, easing slightly from 5.61% in the first quarter.

Looking ahead, Ibrahim said investors will closely watch not only MSCI's index review but also FTSE Russell's Aug. 10–14 review period, particularly any decision regarding Indonesia's freeze status, which could become a key near-term catalyst for the domestic equity market.

Other exchange rates against the rupiah on Thursday were: Singapore dollar at Rp 13,980, Japanese yen at Rp 113.55, Australian dollar at Rp 12,625, and euro at Rp 20,684.

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