Rupiah can potentially tumble amid correction in regional currencies

The rupiah exchange rate, traded between banks in Jakarta, Tuesday, can potentially weaken amid regional currencies floundering.

“This morning, strong Asian currencies — Japanese yen, Hong Kong dollar, and Singapore dollar — opened weaker against the US dollar that could be a sentiment driving the rupiah’s decline,” economist Samuel Asset Management Lana Soelistianingsih remarked in Jakarta on Tuesday.

Until 9:30 a.m. WIB (Western Indonesian Standard Time), the rupiah remained sluggish at Rp14,078 per US dollar, or akin to the previous day’s position.

Soelistianingsih has forecast that today, the rupiah will continue to weaken to lie in the range of between Rp14,080 and Rp.14,100 per US dollar.

On the external side, the US housing sector data indicates a drop, apparent from building permits in the US plummeting 1.7 percent month-to-month (mom), below market expectations, falling up to 0.3 percent, and the lowest since October 2018.

Other data backing a slump in the property sector were the sales of previously owned houses tumbling 4.9 percent mom in March 2019.

“The housing sector is generally one of the early indicators of an economic slowdown, though it has not corroborated that this trend continues,” Soelistianingsih remarked.

A slowdown in the US economy will perhaps result in the US central bank adopting a more dovish stance on monetary policy by not hiking the benchmark interest rate or even lowering it.

Source: ANTARA News