Jakarta. Rupiah weakened further against the US dollar on Friday morning, slipping back into the Rp 17,800 territory as the greenback climbed to its strongest level in more than a year following the Federal Reserve’s hawkish policy stance.

Bloomberg data showed the rupiah fell 54 points, or 0.30%, to Rp 17,848 per US dollar at 9:05 a.m. Jakarta time in the spot market.

The local currency had already closed 32 points lower at Rp 17,794 per dollar on Thursday.

According to MarketScreener, the rupiah came under renewed pressure after the US dollar surged to a one-year high on Thursday, as investors raised expectations for further US interest rate hikes following the Federal Reserve’s latest policy meeting.

The Fed on Wednesday kept its benchmark interest rate unchanged at 3.50%–3.75%, marking the start of Chair Kevin Warsh’s comprehensive policy review.

The US Dollar Index rose 0.45% to 100.80 on Thursday, its highest level since May 2025, after jumping 0.85% in the previous session — its biggest daily gain in more than three months.

The stronger dollar also weighed on other major currencies. The Japanese yen slid to its weakest level in two years, while the euro fell 0.31% to $1.1463 and the British pound dropped 0.62% to $1.3206, both touching their lowest levels in more than two months.

Lee Hardman, a senior currency analyst at MUFG, said the Fed’s hawkish policy update could pave the way for a further bullish breakout in the US dollar.

He added that the dollar had been supported by a sharp upward repricing of short-term US interest rate expectations, outweighing the dampening effect from the recent US-Iran agreement.

Sarah Ying, head of FX strategy at CIBC Capital Markets, said there remained room for the US dollar to strengthen further.

As of 10:44 a.m. Jakarta time, other major currencies also strengthened against the rupiah. The Singapore dollar traded at Rp 13,791, the Japanese yen at Rp 110.49, the Australian dollar at Rp 12,477, and the euro at Rp 20,391.

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