Indonesian Rupiah (IDR) vs. U.S Dollar (USD). (Image via Kompas.com)
U.S - China trade war continues, Indonesian Rupiah withersOn Wednesday morning, the exchange rate of Indonesian Rupiah (IDR) was noted weakening against the U.S Dollar (USD) at Rp14,282. Compared to the rate on Tuesday at Rp14,162 per USD, it was weakening by 0.14%. For today, IDR is moving around Rp14.190 per USD.
However, it was not only IDR but the majority of Asian currencies also weakened against the USD. South Korean Won (KRW) declined by 0.50%, Malaysian Ringgit (MYR) by 0.12%, Indian Rupee (INR) by 0.19%, and Philippines Peso (PHP) by 0.23%. Meanwhile, the Japanese Yen (JPY) was stagnant.
In the ASEAN region, only two currencies that strengthened against the USD: Singaporean Dollar (SGD) and Thai Baht (THB) by 0.03% and 0.08% respectively.
For the developed regions, Great Britain Pound sterling (GBP) weakened by 0.02%, European Union Euro (EUR) strengthened by 0.03% and Australian Dollar (AUD) also strengthened by 0.13% against the USD.
The weakening rate of IDR against USD was deemed due to the trade war between the U.S and China. The market players are still monitoring and anticipating the negotiation between the two countries.
Considering the decision of the U.S government to include more Chinese companies on Tuesday amid the Xinjiang incident, the market players predict that the negotiation would be difficult due to the friction.
The U.S and China had already scheduled a two-day meeting between the U.S Trade Representative, Robert Lighthizer, and U.S Secretary of Treasury, Robert Mnuchin, and Chinese Vice Premier, Liu He, which will be held tomorrow and Friday.
While China only wanted the U.S to reduce the import tariffs and to purchase more farm products, the U.S wanted a comprehensive agreement covering the protection of intellectual property rights for the U.S companies.
Due to the uncertainty, IDR is predicted to weaken until the negotiation has reached an agreement.