Rupiah Likely to Plunge with Nonfarm Payroll, Political Issues
6 October 2014 00:32 WIB
TEMPO.CO, Jakarta - The rupiah is predicted to weaken further following the sharp increase in the United States nonfarm payroll report. The US Bureau of Labor Statistics had reported that September's nonfarm payroll grew by 248,000 people, a significant rise from August's 180,000. The increase caused the market to speculate more on The Fed's plan to raise interest rates.
"Non-farm payrolls increased, dollar assets are accumulated, and the rupiah will be more depressed," said Daru Wibisono, an analyst with PT Monex Investindo Futures.
The nonfarm payroll growth is also pushing the US unemployment rate down to 5.9 percent. The labor market recovery, Daru said, would encourage the Fed to end its quantitative easing (QE) program in a meeting later this month.
Daru said the rupiah is also suffering from domestic political sentiments. The Red and White Coalition might secure the post for the People's Consultative Assembly (MPR) speaker, which, Daru said, could increase investment uncertainty.
Today the rupiah is predicted to move in a wide range of 12,130-12,240 per US dollar. According to Daru, the rupiah correction could only be halted by some interventions by the monetary authorities.
PDAT | MEGEL JEKSON
