US dollar strengthens as rupiah and rupee hit all-time lows

Editor KOMPAS.com - The Indonesian rupiah and Indian rupee came under renewed pressure on Wednesday trading as the US dollar strengthened amid unresolved tensions with Iran. The exchange rate of the US dollar was around Rp 17,701 and 96.81 rupees per US dollar. Rising energy prices and growing global uncertainty have driven investors back to dollar-denominated safe-haven assets. That pressure has also pushed the rupiah and rupee to new all-time lows. Global markets are now worried that higher energy prices will force central banks to keep policy rates higher for longer. That has spurred global bond selling. The yield on the US 30-year government bond even rose to its highest level since 2007. US President Donald Trump previously said the US may need to strike Iran again. Yet he also said Tehran is beginning to seek a deal to end the war. The conflict has shaken the global financial markets and driven energy prices sharply higher. The British pound traded at around 1.34 US dollars, not far from six-week lows. Meanwhile, the Australian dollar fell to around 0.7105 dollars and the New Zealand dollar to 0.5834 dollars. Both currencies are often seen as indicators of global risk sentiment and are now approaching five-week lows. Against a basket of major currencies, the US dollar index stood at 99.306.