Jakarta. The Indonesian rupiah strengthened against the US dollar in Thursday morning trading. According to Bloomberg data, the rupiah in the spot exchange market was at Rp 15,956 per US dollar, appreciating by 75.5 points (0.47 percent) compared to yesterday's trading session. The rupiah had previously hovered around Rp 16,000 per US dollar in the past month.

"The April trade balance, which remains in surplus, and first-quarter 2024 GDP growth of over 5 percent, provide positive sentiment for the rupiah," said financial market analyst Ariston on Thursday.

Based on data from the Central Statistics Agency (BPS), Indonesia's trade balance has been in surplus for four consecutive years, with a cumulative value of $157.21 billion. Indonesia's trade surplus in April 2024 was $3.56 billion, down by $1.02 billion monthly.

On the other hand, Ariston mentioned that the strengthening of the rupiah is also supported by the release of several US economic data. US April 2024 inflation data showed a slight decrease compared to the previous month. Other important data released simultaneously were US retail sales and the New York area manufacturing index, both showing a decline compared to the previous month.

"This provides positive sentiment for risk assets because this decline increases the likelihood of a cut in the US benchmark interest rate," he said.

Investors now see a 50.5 percent chance that the Federal Reserve will start cutting interest rates in September, according to the CME FedWatch tool.

US April 2024 inflation grew by 3.4 percent year-on-year (yoy), lower than the previous month's 3.5 percent (yoy). Meanwhile, on a monthly basis (month-on-month/mom), April 2024 inflation was recorded at 0.3 percent, down from the previous month's 0.4 percent.

Ariston stated that the rupiah is likely to strengthen further against the US dollar today, and he predicts the exchange rate to move in the range of Rp 15,950 to Rp 16,050 per US dollar.