The rupiah strengthened due to a dovish statement by Chairman of Board of Governors Jerome Powell weighing heavily on th
1 December 2018, 08:48
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The rupiah strengthened due to a dovish statement by Chairman of Board of Governors Jerome Powell weighing heavily on the US Dollar.
Powell's comments that interest rates " slightly below " the neutral range are likely to spark speculation that the Fed will stop interest rates first in the next year. Investors' expectations regarding the increase in interest rates after December declined, so that the Dollar declined further in the short term. Reduced concerns about capital outflows as a weaker dollar is a positive development for developing countries. Emerging market currencies including the Rupiah will benefit most from the depreciation of the dollar going forward.
From the technical aspect, USDIDR moved back towards 14300 because the Dollar weakened.
The dollar abdicated because of Powell.
The dollar was knocked out of the throne on Wednesday as dovish comments from Powell prompted investors to reevaluate expectations of a rate hike.
It should be noted that one of the main drivers behind the fantastic dollar appreciation in recent months is speculation of an increase in interest rates. Investors now only estimate a one-time increase in interest rates in 2019, so that the bulls are threatened with losing their prowess.
Investors' attention will be drawn to the results of the Fed meeting which is likely to support expectations of a rate hike in December. The results of this meeting will be very much considered to look for further cues about the planned Fed rate hike in 2019. If the results of the meeting are dovish nuanced like Powell's statement, then the Dollar might be in trouble.
It should be noted that one of the main drivers behind the fantastic dollar appreciation in recent months is speculation of an increase in interest rates. Investors now only estimate a one-time increase in interest rates in 2019, so that the bulls are threatened with losing their prowess.
Investors' attention will be drawn to the results of the Fed meeting which is likely to support expectations of a rate hike in December. The results of this meeting will be very much considered to look for further cues about the planned Fed rate hike in 2019. If the results of the meeting are dovish nuanced like Powell's statement, then the Dollar might be in trouble.
- New annual low level for oil
Oil prices weakened to a new annual low on Thursday as investors revisited OPEC's ability to cut production firmly to erase excess supply in the global market.
Russian President Vladimir Putin's comments said that Russia was quite comfortable with the current level of oil prices of around $ 60 adding to negative pressure. The price of Brent crude is around $ 58 at the time of writing. Concerns about excessive supply and falling demand are the main factors that disrupt the oil market, the prospects for Brent and WTI remain bearish.
Russian President Vladimir Putin's comments said that Russia was quite comfortable with the current level of oil prices of around $ 60 adding to negative pressure. The price of Brent crude is around $ 58 at the time of writing. Concerns about excessive supply and falling demand are the main factors that disrupt the oil market, the prospects for Brent and WTI remain bearish.
- Dollar weakens, Gold shines
Gold shines brightly when the dollar weakens due to Jerome Powell's dovish statement.
Current price movements prove that the direction of gold prices is still determined by the performance of the dollar and US interest rate speculation. The dollar has the potential to weaken in the short term, so this precious metal has the potential to surpass the resistance level of $ 1228.00. Daily closure above this level can lead to a further increase towards $ 1240
Current price movements prove that the direction of gold prices is still determined by the performance of the dollar and US interest rate speculation. The dollar has the potential to weaken in the short term, so this precious metal has the potential to surpass the resistance level of $ 1228.00. Daily closure above this level can lead to a further increase towards $ 1240
