Ahead of The Fed Decision, US Dollar Weakens Slightly

JAKARTA — The United States dollar weakened slightly on Wednesday. The movement occurred as oil prices fell, providing room for risk appetite in the markets. This situation arose ahead of a series of important decisions from global central banks. The dollar index, which measures the strength of the US dollar against a basket of major currencies, rose slightly by 0.06 per cent to 99.61. This index had weakened over the previous two days. The euro fell 0.05 per cent to 1.1532 US dollars, or approximately Rp19,514. The pound sterling remained relatively stable at 1.3355 US dollars, or approximately Rp22,608. The Japanese yen remained at weak levels, around 159 per US dollar, or approximately Rp16,924 per yen. This position is approaching the threshold that often triggers concerns about intervention by Japanese authorities. The decline in oil prices provided space for the markets to recover, albeit limited. Data from the American Petroleum Institute showed an increase in US crude oil inventories. This condition restrained the rise in energy prices and eased pressure in the markets. Head of foreign exchange strategy at Sumitomo Mitsui Banking Corporation, Hirofumi Suzuki, assessed that the improvement in sentiment is not yet strong. “With the rise in crude oil prices apparently pausing for the time being, it does not mean the situation has improved dramatically, but for now, the overall market seems to have recovered slightly,” Suzuki said. “In the case of USD/JPY, it can be said to have moved slightly towards yen strengthening,” he added. The global situation also affects the diplomatic agenda. United States President Donald Trump has postponed plans to visit Beijing to meet Chinese President Xi Jinping. Japanese Prime Minister Sanae Takaichi is still scheduled to depart for Washington to meet Trump.