Government shutdown affects currency exchange rates

Unknown, Tuesday, April 12, 2011

 Researcher and senior analyst PT Money Invested Futures Albert Christian K said strengthening the rupiah today triggered potential government shutdown in the U.S. that weakened the dollar. According to him, the U.S. government's budget impasse compromise in Congress threatening the closure of several offices of civil servants (government shutdown).

Therefore, according to him, the market views that political risk weakening U.S. dollar. "Throughout the trade, the rupiah had strengthened to a level of 8632 and 8648 as the weakest level," he told INILAH.COM, in Jakarta on Monday (11 / 4).

Rupiah exchange rate in the interbank foreign exchange spot market on Monday (11 / 4) close higher thin three points (0.03%) so 8.648/8.658 per U.S. dollar from the position last weekend 8.651/8.657.

Furthermore, Christian said, strengthening the rupiah also supported by domestic factors. One of them is the rating agency Standard & Poor's rating is to up grade ratings on Indonesia from BB to BB + at the weekend.

Market view, rating agencies such as Fitch Ratings and Moody's, also will increase the ranking of Indonesia to the level of investment grade. Therefore, Moody's itself has a level rating of RI below investment grade. Therefore, in the event of increase ratings, RI directs investment grade earned. "At the latest, it will be achieved grade end of 2012," he added.

However, the strengthening of the rupiah today is limited. Therefore, the market did profit taking before the rupiah touched the psychological level of 8630 per U.S. dollar. After rupiah strengthened to level of 8632, rupiah weakened back into the area 8648. "Overall, the rupiah weakened compared to the opening of 8644. But compared to the closing weekend, the rupiah strengthened thin," he added.

Meanwhile, the U.S. dollar traded against the major currencies varied. "Against the combined currency of the European countries (the euro), the dollar strengthened to a thin level of U.S. $ 1.4457 from U.S. $ 1.4480 per euro," he added.

From the stock market, capital markets analyst Irwan Ariston Napitupulu said, should stock index fell today. Because after through 3480 domestic index not experience correction. "As a result, the strengthening of the index has accumulated 300 points so far," he said.

However, he underlined, the market is still curious to penetrate the new 3788 level achieved in 3768 in the morning session. "Therefore, the index managed to close higher thin 4.03 points (0.11%) to be 3745.838," said Irwan Ariston.

Government shutdown is when the government stops providing all but "essential" services. Typically, services that continue despite a shutdown include police, fire fighting, postal service, armed forces, utilities, air traffic management, and corrections



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