US Dollar Approaches Rp18,000 Again
Entering a new month, the Rupiah exchange rate opened weaker against the US Dollar in trading on Wednesday (1/7/2026).
According to Refinitiv data, the Garuda currency began its first trading session of July 2026 in the red. The Rupiah opened 0.42% lower at the level of Rp1.7950/US, approachingthepsychologicallevelofRp18, 000/US.
This weakness follows the previous trading session on Tuesday (30/6/2026), where the Rupiah closed down 0.22% at Rp17,875/US$.
Meanwhile, the US Dollar Index (DXY), which measures the strength of the greenback against six major world currencies, was observed to have strengthened by 0.11% to the level of 101.293 as of 09:00 WIB.
Pressure on the Rupiah at the start of today’s trading occurred amidst the US Dollar still showing strength in the global market. The US Dollar tends to remain strong alongside increasing market expectations regarding the possibility of interest rate hikes by the US central bank, the Federal Reserve (The Fed), in the near future. These expectations are supported by US job vacancy data, which remains solid and demonstrates the economic resilience of the United States.
Based on data from the U.S. Bureau of Labor Statistics, the number of job vacancies in May rose by 9,000 to 7.594 million. This figure was higher than the market expectation of 7.296 million and surpassed the revised April data of 7.585 million.
Strong labour data has led the market to closely scrutinise the direction of Federal Reserve policy. After maintaining interest rates at the June meeting within the 3.50%-3.75% range, several Fed officials have left room for potential rate hikes for the remainder of the year.
According to the CME FedWatch Tool, market participants now estimate the probability of a 25 basis point interest rate hike at the Fed meeting on 28-29 July at 33.70%. Meanwhile, the probability of rates being maintained at the current level stands at 66.30%.
Nevertheless, the strengthening of the US Dollar is still being tempered by easing global oil supply concerns. Shipping activity in the Strait of Hormuz has reportedly increased, reducing fears regarding oil supply disruptions. This condition is also helping to restrain energy-based inflationary pressures.
Domestically, the market is now awaiting the release of the June 2026 inflation data, which will be announced by Statistics Indonesia (BPS) this afternoon.
A market consensus gathered by CNBC Indonesia from 13 institutions expects the Consumer Price Index (CPI) to rise, or experience inflation, by 0.30% month-to-month (mtm) in June 2026.
On a year-on-year (yoy) basis, inflation is expected to reach 3.2%.
As a note, in May 2026, Indonesia recorded monthly inflation of 0.28%. On a yearly basis, inflation was recorded at 3.08%, with core inflation at the level of 2.59%.
This inflation data will serve as a crucial reference for Bank Indonesia (BI) in formulating monetary policy direction, including decisions made during the BI Board of Governors Meeting later this month.