Rupiah Closes Weaker as US Dollar Climbs to Rp17,990

The Garuda currency closed weaker against the United States (US) dollar in trading on Wednesday (8/7/2026), amid escalating war in the Middle East. Referring to Refinitiv data, the rupiah exchange rate ended in the red, correcting 0.11% to the level of Rp17,990/US.TherupiahactuallyopenedmorningtradingatRp17, 970/US, stagnant compared to the previous close. However, as trading progressed, the rupiah came under pressure and briefly breached the psychological level of Rp18,000/US$. Meanwhile, the US dollar index (DXY), which measures the greenback’s strength against six major world currencies, was observed weakening 0.07% to 100.952 as of 15.00 WIB. The rupiah’s movement throughout the day was still influenced by the dynamics of the US dollar in global markets. Although the DXY was seen weakening this afternoon, the US dollar index had remained in a strengthening zone from yesterday’s close until this morning’s opening. This dynamic occurred due to rising tensions in the Middle East. The escalation happened after the United States launched retaliatory strikes on Iran in the early hours of Wednesday local time, following reports of attacks on several tankers transiting the Strait of Hormuz. The latest attack has reignited market fears over potential disruptions to global energy supplies. The Strait of Hormuz is one of the world’s most important oil and gas shipping lanes, so any disruption in the region can immediately trigger concerns over energy distribution. The rise in oil prices has revived inflation fears. For financial markets, mounting inflationary pressure could make the US central bank (The Federal Reserve/The Fed) more cautious in determining the direction of interest rate policy. Market participants are now also awaiting the minutes of The Fed’s June meeting, scheduled for release early Thursday morning Indonesian time. The minutes will be scrutinised for further signals regarding the direction of US monetary policy, especially after the latest labour data showed a slowdown. Currently, market participants estimate the probability of a 25 basis point rate hike at The Fed’s 28-29 July meeting stands at 27.30%. Meanwhile, the probability of rates being held at current levels reaches 72.70%, based on the CME FedWatch Tool. Domestically, Bank Indonesia (BI) recorded the June 2026 Consumer Confidence Index (IKK) at an optimistic level of 117.8. However, this figure is lower than the May 2026 IKK, which was recorded at 120.9. In the report released on Wednesday (8/7/2026), BI stated that consumer optimism was still supported by perceptions of current economic conditions and expectations for future economic conditions. The Current Economic Conditions Index (IKE) was recorded at 109.2, while the Consumer Expectations Index (IEK) stood at 126.4. Both remain above the 100 level, indicating that consumers are still optimistic, although pressure is beginning to show compared to the previous month.