US-Iran Heats Up, Exchange Rates Weakens After US Military Forces Attacked by Iran

TRIBUNBATAM.id - The rupiah exchange rate weakened against US dollar at the opening of trading on the spot market on Wednesday (01/08/2020).

Citing Bloomberg data, at 08.21 WIB, rupiah opened at the level of IDR 13,935 per US dollar, down 57 points or 0.41 percent compared to Tuesday's close of IDR 13,878 per US dollar.

Head of Research and Education in PT Monex Investindo Futures, Ariston Tjendra said the tension between US and Iran that led to Iran's counterattack to US military base in Iraq was seen as pushing rupiah to weaken.

"Earlier today there was a retaliatory military strike from Iran to US military base in Iraq by firing missiles. Growing risk-averse sentiments that would overshadow trade in financial markets today, including rupiah," Ariston was quoted as saying from Kompas.com.

Ariston assess this counterattack can trigger mutual action and does not rule out the possibility of ending in an open war at Middle East.

"This will lead to Middle East war and rising crude oil prices could also burden rupiah because Indonesian CAD could deteriorate," he explained.

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Ariston added, in the next few days rupiah was projected to weaken.

Even the weakening can exceed IDR 14,000 per US dollar.

Ariston projects rupiah today will move in the range of IDR 13,900 per US dollar to IDR 14,050 per US dollar.

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