US Dollar Strong Sentiment Tax Bill, Rupiah Closed Weakened

JAKARTA – The rupiah closed lower in late trading today, in line with the depreciation of the majority of Asian currencies against the US dollar.

Rupiah closed down 0.03% or 4 points at Rp13.527 per US dollar, after opening with a weakening of 0.09% or 12 points at 13,535 positions.

On Friday trading (1/12), the rupiah was able to rebound even slightly by 0.02% or 3 points in the position of Rp13.523 per US dollar.

During today’s trading, the rupiah is likely to weaken in the range of Rp13,520 – Rp13,549 per US dollar.

With the rupiah, the majority of Asian currencies depreciated with the Philippine peso leading the weakening by 0.76%, according to Bloomberg data.

The weakening of the peso followed the Japanese yen and South Korean won, which weakened 0.66% and 0.23% respectively.

Meanwhile, the US dollar index, which measures the strength of the US dollar exchange rate against a basket of major currencies, gained 0.37 percent, or 0.344 points, to 93.229 at 16:56 pm.

The dollar strengthened after market players responded positively to the Senate’s approval of the tax bill last weekend.

As reported by Reuters, the US Senate approved a tax reform on Saturday (2/12), so that paved the steps of Republican and President Donald Trump towards their goal to cut paja for the company.

The move is likely to further increase the company’s earnings and cause a lot of   stock buybacks . US stock markets have been rallying for months in the hope that the government will provide a significant tax rebate for the company.

“The possibility of tax cuts submitted to the Trump table for signing increased significantly and we started this week with a reconciliation process between the Parliament and Senate tax plans,” Chris Weston, chief market analyst at IG, told Reuters.