Rupiah weakens due to new Middle East escalation

The rupiah exchange rate moved weaker by 71 points, or 0.39 per cent, to Rp18,107 per US dollar on Monday morning, compared to the previous close of Rp18,036 per US dollar. Currency analyst Lukman Leong from Doo Financial Futures stated that the rupiah’s weakness was influenced by new escalations in the Middle East. He noted that rising oil prices, triggered by these tensions, have also placed pressure on the rupiah. According to reports, Iran launched several missiles towards northern Israel on Sunday night, following threats to retaliate against recent Israeli airstrikes in the outskirts of Beirut. Furthermore, Hezbollah’s military operations were prompted by ongoing Israeli attacks on dozens of settlements in southern Lebanon. Other market sentiments stemmed from the release of US Non-Farm Payroll (NFP) data, which exceeded expectations, including 55,000 jobs added in the government sector and 70,000 in the recreation and hospitality sectors. Based on these factors, the rupiah is projected to fluctuate between Rp18,000 and Rp18,150 per US dollar.