Baht, Ringgit, Won Surge as US Dollar Weakens, Rupiah Still Lagging
The rupiah managed to close the final trading session of the week in positive territory. However, on a weekly basis, the Garuda currency was still unable to escape pressure from the United States dollar.
According to Refinitiv, in trading on Friday (3/7/2026), the rupiah closed up 0.24% at Rp17,945/US$. This gain allowed the rupiah to break a three-day losing streak. Nonetheless, point-to-point, the currency still weakened by 0.22% for the week.
This condition indicates that pressure on the rupiah has not fully subsided. Moreover, the rupiah’s position remains not far from the psychological level of Rp18,000/US$.
Domestic pressures remain considerable. A series of economic data released earlier in the week gave negative signals for the Indonesian economy. Indonesia’s inflation rose again in June 2026. At the same time, Indonesia’s trade balance recorded a deficit for the first time in six years. Manufacturing activity also came under further pressure after the Manufacturing PMI fell deeper into contraction territory.
The rupiah’s movement this week occurred amid a weakening of the US dollar in global markets. The US dollar index (DXY) was recorded down 0.49% for the week to 100.857.
The weakening of the US dollar was actually a tailwind for Asian currencies. However, the rupiah’s strengthening at the end of the week was not enough to bring the Garuda currency to a positive weekly performance.
Although the dollar index weakened, the movement of Asian currencies this week was not entirely uniform. Six currencies managed to strengthen against the US dollar, while four others still weakened.
The Thai baht was the strongest Asian currency this week with a gain of 0.54%. The next position was occupied by the Malaysian ringgit, which strengthened 0.44% to MYR 4.067/US, followedbytheSouthKoreanwonwhichrose0.39. The Chinese yuan also strengthened 0.27% to CNY 6.7797/US, theJapaneseyenrose0.22.
Meanwhile, the Taiwan dollar was the most pressured Asian currency with a depreciation of 0.25%. The rupiah followed with a weakening of 0.22%, then the Philippine peso weakened 0.21% and the Vietnamese dong fell 0.19%.
This condition shows that the weakening of the US dollar was not strong enough to lift all Asian currencies. Some regional currencies did manage to strengthen, but the rupiah was still held back by less positive domestic sentiment.
Pressure on the US dollar this week came from United States labour data which was much weaker than expected. US non-farm payrolls data showed the economy only added 57,000 jobs in June 2026. This figure was far below the expectations of economists in a Reuters poll who had forecast an addition of 110,000 jobs.
This data signalled that the US labour market is beginning to lose steam. As a result, market participants started to cut expectations that the US central bank, the Federal Reserve or The Fed, would raise interest rates again in the near future.
Before the labour data was released, the market had been quite aggressive in predicting that The Fed still had a chance to raise interest rates in September. However, after the data came out, expectations for a rate hike began to decline. This condition put pressure on the US dollar because when the chance of a Fed rate hike recedes, the dollar’s attractiveness as a high-yielding asset also diminishes.
For Asian currencies, the weakening of the US dollar should have been a positive catalyst. However, the response of each currency was not the same because the market also continues to consider the domestic conditions of each country.