Rupiah projected to strengthen amid easing Middle East tensions

Photo caption: Illustration - Indonesian rupiah and U.S. dollar banknotes are seen alongside a stock market chart.

Jakarta (ANTARA) - Doo Financial Futures analyst Lukman Leong projected that the rupiah would strengthen as geopolitical tensions in the Middle East have started to de-escalate.

"The rupiah has the potential to strengthen against the US dollar amid easing geopolitical tensions in the Middle East," he told ANTARA here on Monday.

According to Anadolu, no new attacks by the United States or Iran were reported for the second consecutive night, while Pakistan and Qatar stepped up mediation efforts to promote de-escalation between Washington and Tehran.

The lull followed nearly two weeks of US strikes targeting Iran's military infrastructure, coastal surveillance systems, missile and drone facilities, naval assets, and logistics centers, according to the US Central Command (CENTCOM).

Pakistani government sources told Anadolu that Islamabad and Doha have intensified the exchange of messages between the United States and Iran. 

The move came after both sides conveyed their responses to a joint formula proposed by mediators to end the conflict, which has lasted for several months.

However, Leong said the rupiah's gains would likely be limited as investors remain in a wait-and-see mode ahead of a series of key US economic data releases, including gross domestic product (GDP) and Personal Consumption Expenditures (PCE) inflation.

US GDP is projected to grow 2.3 percent quarter-on-quarter (qoq), while core PCE inflation is expected to increase by 0.1 percent quarter-on-quarter, he said.

In addition, the market is awaiting the upcoming Federal Open Market Committee (FOMC) meeting, which is expected to address the recent rise in global oil prices and concerns over a possible return of inflationary pressures.

Based on these factors, Leong projected the rupiah to trade in the range of Rp17,900 to Rp18,000 per US dollar.