{
  "id": 5045421,
  "title": "Indonesian Rupiah declines as US Dollar gains on Fed rate hike bets",
  "url": "https://urgent.news/2026/09/02/indonesian-rupiah-declines-as-us-dollar-gains-on-fed-rate-hike-bets",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-02T07:47:36.000Z",
  "source": {
    "name": "FXStreet",
    "slug": "fxstreet",
    "url": "https://www.fxstreet.com/news/indonesian-rupiah-declines-as-us-dollar-gains-on-fed-rate-hike-bets-202609020747"
  },
  "original_language": "en",
  "account": "The Indonesian Rupiah experienced a decline as the US Dollar gained strength following predictions of a Federal Reserve rate hike. During the European trading hours on Wednesday, the USD/IDR pair reached around 17,810, appreciating due to increased bond yields and surging oil prices. These factors have reignited concerns over sustained inflation and potential future interest rate hikes by the Federal Reserve. The surge in the US 10-year Treasury yield to 4.80%, its highest level since early 2025, further fueled these worries. This inflationary pressure was exacerbated by a significant jump in crude oil prices following heightened tensions between the United States and Iran, raising concerns about potential disruptions in energy supplies from the Middle East. Recent US economic data presented a mixed picture for market sentiment, with July JOLTS job openings falling below expectations and the ISM Manufacturing PMI dropping slightly in August. However, the PMI remained in expansion territory, signaling a robust manufacturing sector. Investors are now focusing on the upcoming ADP employment report and Friday's Nonfarm Payrolls to determine the Federal Reserve's next steps regarding interest rates. Analysts at ING stress that market attention is still primarily directed towards the long end of the US curve, where there is little appetite for fiscal consolidation. They note that fears remain that Treasury Secretary Scott Bessent may intervene again to support the bond market, and some investors might look to buy USD/CHF to express their dollar debasement strategy. In Indonesia, price pressures accelerated in August, with headline inflation rising from July's three-month low, driven by rising food costs. Underlying price dynamics also strengthened, as core inflation hit its highest level since March 2023. Parliament confirmed Destry Damayanti as Governor of Bank Indonesia, raising the country's 2027 growth forecast to a range of 5.2% to 6.0%, the fastest expansion pace since 2012. The terms \"risk-on\" and \"risk-off\" characterize the level of risk investors are willing to tolerate in a given period. A \"risk-on\" market sees optimism about the future, leading investors to buy risky assets. Conversely, a \"risk-off\" market prompts investors to become more cautious, buying less risky assets that offer a better return, even if modest. During \"risk-on\" periods, stock markets usually rise, most commodities—except gold—gain value, currencies of commodity-exporting nations strengthen, and cryptocurrencies also increase. In \"risk-off\" markets, bonds, especially major government bonds, rise, gold shines, and safe-haven currencies like the Japanese Yen, Swiss Franc, and US Dollar benefit. The Australian Dollar, Canadian Dollar, New Zealand Dollar, and minor currencies like the Ruble and South African Rand tend to rise in risk-on markets due to their heavy reliance on commodity exports. Conversely, the US Dollar, Japanese Yen, and Swiss Franc typically strengthen during risk-off periods, as investors flock to these currencies' perceived safety.",
  "summary": "USD/IDR extends its gains for the second successive day, trading around 17,810 during the European hours on Wednesday.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}