The Indonesian rupiah may face pressure in today's final trading session of the week in the spot market, amid renewed global investor interest in assets within the United States (US) market.

The US dollar index closed stronger last night in New York, causing the rupiah's Non-Deliverable Forward (NDF) rate in the offshore market to weaken slightly by 0.08% to Rp16,380 per US dollar. This morning, the rupiah NDF moved steadily with a slight appreciation to Rp16,374 per US dollar.

This level remains weaker compared to the rupiah's spot closing yesterday at Rp16,330 per US dollar, indicating that the potential for further weakening still exists.

In the Asian market this morning, currency movements were mixed. The Malaysian ringgit and South Korean won strengthened, as did the Japanese yen, Singapore dollar, and offshore yuan. However, several other currencies weakened, including the Taiwan dollar, Thai baht, Philippine peso, and Hong Kong dollar.

The rupiah may find support if foreign capital inflows into the domestic stock market continue. This week, foreign investors have recorded a net buy of US$94.4 million, approximately Rp1.54 trillion.

The resurgence of investor enthusiasm in the US equity market may spill over to global investors in emerging markets, including Indonesia.

The rupiah can also hope for stable foreign interest in the government bond market, as the yield spread between Indonesian Government Securities (SUN) and US Treasuries widened again to 231 basis points this morning, following a decline in US Treasury yields yesterday.

On May 21, when Bank Indonesia decided to cut the benchmark interest rate by 25 basis points, foreign investors purchased SUN worth US$38 million, bringing the total global fund net buy in fixed income assets to US$207.3 million this week.

Technical Analysis:

Technically, the rupiah still has the potential to continue strengthening, although it is beginning to be limited by market sentiment. The nearest resistance level for the rupiah is at Rp16,310 per US dollar, with the next potential resistance at Rp16,300 per US dollar after breaking the previous trendline, and Rp16,200 per US dollar as the most optimistic strengthening level in the daily timeframe for mid-term trading trends.

Meanwhile, the nearest support level for the rupiah is at Rp16,350 per US dollar. If this level is breached, it will confirm the next support at Rp16,400 per US dollar as psychological support, and Rp16,450 per US dollar within the week.

US Bond Market Recovery:

The recovery of the US bond market on Thursday was also supported by economic data. Business activity and output expectations in the US showed improvement as trade concerns eased, although price pressures continued to rise.

Initial jobless claims fell to the lowest level in four weeks, indicating a still-solid labor market. However, existing home sales unexpectedly declined.

"The 'hard' economic data has not shown that the US economy is under pressure," said Don Rissmiller of Strategas, as quoted by Bloomberg.

"Some economic activity seems to have been pulled forward before tariffs were implemented. The impact will be felt starting now, and signals from the bond market to politicians will add pressure to interest rate-sensitive sectors as budget negotiations continue throughout the summer."

Dovish Comments from Fed Officials:

Dovish comments from Federal Reserve officials also provided support to the market.

Federal Reserve Vice Chairman Christopher Waller stated that the central bank could begin cutting interest rates in the second half of 2025 if the Trump administration's trade tariffs on US trading partners can be reduced to around 10%.

"If tariffs can be brought down to around 10% and everything is agreed upon and finalized by July, then we're in a pretty good position for the second half of the year," Waller said in an interview with Fox Business on