Update COVID-19 in Indonesia: 1,298,608 confirmed infections, 35,014 deaths (23 February 2021)
23 February 2021 (closed)
USD/IDR (14,146) -6.00 -0.04%
EUR/IDR (17,335) +57.05 +0.33%
Jakarta Composite Index (6,272.81) +17.50 +0.28%
Indonesia's benchmark Jakarta Composite Index fell 0.56 percent to 5,615.49 points on Wednesday (17/05), in line with the performance of stocks across the Asia-Pacific region. The weak performance is caused by increasing concern about the controversial actions and policies of US President Donald Trump. After the emergence of several new scandals over the past couple of days more and more people assume Trump will not be able to finish his presidential term as calls for impeachment are heard.
Over the past days there have emerged two cases that show Trump is not fit to be president. Firstly, he was criticized for revealing highly classified information to the Russian foreign minister and ambassador during a meeting at the White House last week. The information involved details of intelligence on ISIS and a plot to blow up planes using laptops.
Secondly, it is reported in media that Trump - in February 2017 - requested FBI Director James Comey to drop an investigation into Michel Flynn, Trump's former national security adviser. Flynn was forced to resign in February 2017 (after a short 24-day tenure) after information surfaced he had misled US Vice President Mike Pence about his communications with Sergey Kislyak, the Russian ambassador to the US.
Then, on 10 May, 2017, Comey was fired by Trump because "he wasn't doing a good job". However, rumor has it Trump fired Comey because of the former's concern about Comey's investigation into the administration's Russia ties. Whether true or not, this latest scandal is undermining investors' risk appetite on Wednesday, around the globe.
Besides political controversy, a new report showed US housing starts fell 2.6 percent to a seasonally adjusted annual rate of 1.17 million units, its lowest level in five months.
As a result the US dollar weakened, now having given up all gains it made after Trump won the US presidential election in November 2016. Hence, the Japanese yen appreciated and made Japanese stocks (those export-oriented stocks) unattractive. Meanwhile, crude oil was also falling on Wednesday (17/05), hence further undermining risk appetite.
However, the Indonesian rupiah bucked the trend of most emerging currencies, depreciating 0.18 percent to IDR 13,324 per US dollar (Bloomberg Dollar Index). Last week, we reported that Indonesia's central bank is intervening in markets to prevent the rupiah from strengthening to much (in an effort to keep its exports attractive). Several traders say this could be the case again today.