Yellen's Statement Corrects Greenback; Rupiah Gains
17 July 2014 08:40 WIB
TEMPO.CO, Jakarta - Regional currencies strengthened against the US dollar following Federal Reserve's governor Janet Yellen's warning that "considerable uncertainties" about the US economy outlook could lead to interest rates rising sooner, or later, than expected.
Yellen's comment prompted investors to abandon their dollar-denominated assets, allowing the rupiah to gain 38 points (0.33 percent) to 11,697.5 per US dollar.
Before the U.S. Congress, Yellen said the US jobs market had "registered notable improvements" this year but the pace of economic growth "bears close watching".
The statement practically shifted the investors' eyes onto portfolios in emerging markets, said Samuel Sekuritas Indonesia's economist, Rangga Cipta,.
Rangga said the rupiah will not break its 11,500-mark anytime soon. Uncertainties surrounding the presidential election result may cause the rupiah to keep fluctuating within the Rp11,600-Rp,11750-per-dollar range. Moreover, the Fed's plan to taper off its bond repurchase program is beginning to mess with the dollar liquidity in global financial markets.
PDAT | MEGEL JEKSON
