Jakarta. Indonesia’s rupiah weakened on Wednesday as investors weighed the fallout from a US government shutdown that threatens to delay key economic data and cloud the Federal Reserve’s policy path.

The rupiah slipped 0.2 percent to Rp 16,699 per dollar in Jakarta midday trading, Bloomberg data showed. The decline came despite expectations of a short-term rebound if the dollar loses momentum amid Washington’s budget gridlock. On Tuesday, the rupiah had briefly strengthened to Rp 16,665.

“Shutdown risks are weighing on sentiment but could open space for rupiah strength once dollar momentum eases,” said Rully Nova, an analyst at Bank Woori Saudara. He expects the currency to trade in a narrow Rp 16,620–Rp 16,670 band in the near term.

The US plunged into its first federal shutdown in nearly seven years after President Donald Trump and Congress failed to reach a funding deal by Wednesday’s deadline. The closure will halt nonessential government operations and delay the release of critical economic indicators such as payrolls, complicating the Fed’s next moves.

Rully said the disruption could ultimately weaken the dollar as uncertainty mounts. “It creates near-term pressure, but longer term, the shutdown can erode dollar strength,” he said.

Global gold prices extended their record-breaking rally as investors sought safety in the face of US shutdown and signs of a cooling labor market. Spot gold climbed to $3,863.45 per ounce in Asian trading after briefly hitting an all-time high of $3,875.50.

“Momentum is firmly bullish and the $3,900 level is within reach in the short term,” said Andy Nugraha, an analyst at Dupoin Futures Indonesia. 

Goldman Sachs estimates the shutdown could shave 0.15 percentage point off U.S. GDP per week, with growth likely to rebound once government operations resume. Past shutdowns have shown markets to be resilient, though prolonged deadlock may amplify volatility.