Jakarta. The rupiah extended its losses on Tuesday, edging closer to the psychologically important Rp 17,000 per dollar level amid persistent global uncertainty.

The currency closed the Tuesday afternoon session marginally weaker by 1 point against the US dollar at Rp 16,956, after earlier slipping as much as 30 points from Monday’s close of Rp 16,955.

Ibrahim Assuaibi, director of Traze Andalan Futures, said the rupiah remained under pressure from a combination of geopolitical and monetary policy concerns. One key drag was renewed tension surrounding US President Donald Trump and his continued insistence on taking control of Greenland.

Market unease has intensified this month amid fears of potential US military intervention, following reports that US authorities had detained Venezuelan President Nicolas Maduro. Trump is also set to attend the World Economic Forum in Davos, Switzerland, where he is expected to meet several European leaders, although it remains unclear whether the Greenland issue will be formally discussed.

The rupiah stayed in negative territory as investors grew wary of an escalation in trade tensions. Trump has warned that his administration will impose an additional 10% tariff on Denmark and eight other European countries if no agreement is reached over Greenland.

“Meanwhile, European lawmakers have announced plans to freeze the ratification of a trade agreement signed by Trump and European Commission President Ursula von der Leyen last summer,” Ibrahim said in a written statement on Tuesday.

The local currency has also been weighed down by fading expectations of near-term interest rate cuts by the Federal Reserve.

“On rate cut prospects, most analysts now expect the Fed to pause its monetary easing at its meeting later this month, supported by still-resilient labor market conditions,” Ibrahim added.

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