The Fed remains the trigger of the US dollar's weakening. Data on the second-quarter US gross domestic product (GDP) growth, released overnight, fell short of expectations, thereby triggering the US dollar's depreciation.
Jakarta (ANTARA) - The Indonesian rupiah strengthened against the US dollar in the Jakarta interbank market on Friday morning on the back of strong foreign investor interest in domestic bonds and shares, an observer said.

The rupiah rose 29 points, or 0.2 percent, from the previous close of Rp14,480 per dollar to trade at Rp14,454 per dollar at 9.59 a.m. WIB (Western Indonesia Time) on Friday.

The value of 10-year Indonesian government bonds rose on Friday morning, suggesting that money market interest and foreign capital inflows are high, money market observer Ariston Tjendra said on Friday.

"The Fed remains the trigger of the US dollar's weakening. Data on the second-quarter US gross domestic product (GDP) growth, released overnight, fell short of expectations, thereby triggering the US dollar's depreciation," he said.

The US economy grew 6.5 percent in the second quarter of 2021, falling short of market expectations of 8.4-percent growth, he informed. However, the rate of growth was higher than in the previous quarter, when it was recorded at 6.3 percent, he noted.

Sentiment towards risk assets appeared to come under pressure on Friday morning, as reflected by a decline in the Asian share index and US futures index, Tjendra said. The emerging market exchange rates also weakened against the US dollar, he added.

According to Tjendra, these factors could potentially weaken the rupiah's exchange rate against the dollar on Friday.

"The market is likely to be worried about a spike in COVID-19 cases across the world, including in Indonesia, which may slow down economic growth," he said.

Indonesia added 43,479 COVID-19 cases on Thursday, taking the tally to more than 3.33 million since the country reported its first cases in March, 2020.

With 1,898 people succumbing to the infection on Thursday, the COVID-19 death toll climbed to 90,552

Meanwhile, more than 2.68 million people recovered from the virus, bringing the number of active cases to 554,484.

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Translator: Citro Atmoko, Suharto
Editor: Rahmad Nasution
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