Jakarta, CNBC Indonesia – The United States (US) dollar is currently so strong that it affects the currencies of several countries, where the strength of the US dollar seems to be the result of the market’s expectations after the victory of Donald Trump as the next President of the USA.
Reporting from Refinitiv on Friday (15/11/2024), the US dollar index (DXY) closed at 106.69, slightly up 0.02% from the previous day’s trading position. This position is the highest since November 2023 or a year ago.
In fact, in the past week alone, the US dollar index flew 1.61%. In the past month, it is known that the US dollar index has shot up to 2.99%.
There are several factors that make the US dollar increasingly powerful. First that is Trump’s victory in the 2024 US Election. Understandably, Trump has said several times that he wants to make it happen strong dollarstrong US dollar.
Second that is in terms of the opinion of the central bank of the USA (Federal Reserve / The Fed) which is starting to return a hawkafter having some time to act Doubtful Market players responded with disappointment.
Fed Chairman Jerome Powell indicated that the Fed would slow down interest rate cuts. This situation is based on strong US economic growth. The Fed even said that US economic growth was one of the best in the world.
“The economy is not sending a signal that we should rush to get interest rates lower,” Powell said in remarks to business leaders in Dallas, quoted from CNBC International.
The US economy grew 2.8% in the third quarter of 2024, slightly lower than expected but still higher than the historical US trend of around 1.8%-2%. Initial projections show that the US economy will grow by 2.4% in the fourth quarter of 2024.
Powell also said the labor market remained strong despite disappointing employment issues in October that he attributed largely to hurricane damage and labor strikes. Number of jobs non-farm payments (NFP) just 12,000 in October 2024, the lowest since December 2020.
Regarding inflation, he said that there had been progress and that Fed officials expected that inflation would continue to move back to the 2% target. However, this week’s inflation data showed modest increases in consumer and producer prices that were further away from the Fed’s target.
“Inflation is moving closer to our long-term target of 2%, but it is not there yet. We are committed to completing this task,” said Powell.
For the record, US inflation rose to 2.6% (year after year/ yoy) in October from 2.4% (yoy) September 2024. The unemployment rate reached 4.1% in September 2023. The unemployment rate even touched 4.3% in July 2024, the highest level since October 2021.
In the midst of the appreciating US dollar, there are nine other currencies that, compared to the US dollar, are classified as stronger.
The Kuwaiti dinar is the strongest currency in the world, followed by Bahrain dinar, and in third place is the Omani Syria.
CNBC INDONESIA RESEARCH
(chd/chd)
2024-11-16 11:45:00
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