The financial markets have had an interesting year in 2015, with several significant surprises seen in the major asset classes. On the whole, 2015 could probably be best described as a year of stabilizing with stocks and commodities holding mostly steady throughout the period. This has been largely true in the currency markets, as well. But there are some factors that are likely to influence trends for world currencies in new ways in 2016. Central banks in some regions will likely have significant influence in others, and investors will need to remain aware of the possibilities early in order to position for potential trend chances in critical areas.
5 December 2019 (closed)
USD/IDR (14,037) -57.00 -0.40%
EUR/IDR (15,593) -28.80 -0.18%
Jakarta Composite Index (6,152.12) +39.24 +0.64%
Richard Cox is a university teacher in international trade and finance, focusing on lessons in macroeconomics and price behavior in the financial markets. He is a syndicated writer, with works appearing on CNBC, NASDAQ, Economy Watch, Motley Fool, and Wired.com.
Investing strategies utilize technical and fundamental analysis of all major asset classes (equities, energy, foreign exchange, and precious metals). Market strategies generally adopt time horizons of one to six months.
Columns of Richard Cox
Broad activity in the financial markets has been limited over the last few weeks, as holiday-thinned trading conditions have slowed volatility in most of the commonly watched assets. A large part of the reasoning behind this can be seen in the fact that market moving news headlines have not been seen and most investors are still looking for ways to identify the most likely direction to follow in the equities space.
For those who follow Indonesian stock markets, it is no mystery that the trend have not been encouraging or supportive in the year 2015. Several important stock benchmarks that track equity performance for the region show year-to-date losses of 30% or more, and this has led many investors to steer clear of the emerging markets space until things start to stabilize.
For most of this year, the financial media has held a generally positive tone. There have been some exceptions in cases like the Eurozone which is still mired in a deeply divided sovereign debt crisis. But for most of the world, 2015 has been a positive period in terms of general growth in their broad trends. So it might be easy for macro investors to assume that most markets are currently establishing themselves in the bullish direction.
For most of this year, the Indonesian rupiah has met selling pressure against the US Dollar. Year-to-date price activity in the USD/IDR shows a rise from below IDR 12,250 to new highs above IDR 13,330 per US dollar. For Indonesian export companies, this is great news as it means that their products will be cheaper for foreign consumers to buy. For the domestic economy, this creates a different set of implications as it also makes it less likely that foreign investors will be looking to buy into Indonesian assets.