The Indonesian currency surged against the US dollar in the Jakarta interbank market on Thursday morning, shored up by market optimism over a US-China trade deal being reached.
"The market is again optimistic about a potential trade agreement between the US and China after Bloomberg reported a Chinese official will accept partial trade deal if the high tariff is maintained, Samuel Aset Manajemen economist Lana Soelistianingsih remarked in Jakarta on Thursday.
China has also resumed the purchase of large amounts of US farm goods. Both nations’ top officials are scheduled to meet on October 10-11 to deliberate on the trade deal.
"Investors expressed optimism amidst the possibility of the Fed not being firm in its interest rate decision when they meet on October 20-29," Soelistianingsih stated.
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Some top officials of the Fed view the interest rate cut as necessary. However, the number of the Fed officials opposing it has risen steadily.
Soelistianingsih has forecast the rupiah to trade in the range of Rp14,150 to Rp14,170 per US dollar on Thursday.
The currency jumped 18 points, or 0.13 percent, to Rp14,155 per US dollar as per 9:40 a.m. local time on Thursday than its previous level of Rp14,173 per US dollar.
Bank Indonesia’s mid-rate on Thursday strengthened to Rp14,157 per US dollar as compared to Rp14,182 per US dollar earlier.
Editor : Mahdani
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