JAKARTA (TheInsiderStories) – Concerns over the possibility of an upcoming trade war are expected to remain front and center of investor focus once again today. Global stocks are likely to remain pressured after a negative session during this week, with emerging market currencies still feeling the brunt from a lack of risk appetite from traders.
Indonesian Rupiah in the spot market fell 20 points or 0.14 percent to Rp14.179 against U.S dollar on Tuesday (26/06). Throughout this morning, the rupiah is predicted to be around Rp13,263 to Rp14.213 per American dollar.
Together with the rupiah, the majority of currencies in Asia weakened on Tuesday, led by South Korea’s won of 0.84 percent and Chinese yuan, down 0.65 percent and as for only the Japanese yen is up 0.45 percent.
Rupiah, Yuan, Won, Malaysian ringgit, Indian rupee, and Thai baht are once again trading lower against the U.S Dollar, while weaken against the Japanese Yen. The green back was still a touch lower against the yen, with last at 109.72, having fallen to a two-week low of 109.36 on Monday.
Nerves over how others might retaliate against the protectionist nature of U.S President Donald Trump’s policies is likely to lead market sentiment throughout the week. Yuan itself having lost 3 percent in the last two weeks. The Chinese currency is now overall trading at its weakest level since December 2017or trading over 0.7 percent lower year-to-date.
Meanwhile, the U.S dollar index against a basket of major currencies strengthened 0.09 percent or 0.086 points to 94.606 last night. The dollar rose to the day’s highs against a currency basket on Tuesday as market sentiment recovered a day after mounting trade tensions sparked a sell-off in risky assets.
The dollar had been pressured lower as long-term U.S Treasury yields slid amid heightened risk aversion in financial markets. Besides the trade dispute with China, Trump has ratcheted up trade tensions with the European Union by threatening tariffs on cars imported from the bloc.
In Europe, the euro fell to the days lows versus U.S dollar, down 0.38 percent to 1.1658 after edging up to a two-week high of 1.1720 overnight. Sterling was also sliding 0.35 percent to 1.3231 against the American dollar.
Yesterday, U.S stocks rose boosted by the energy, technology and consumer sectors. The Dow Jones Industrial Average closed up 30.31 points, or 0.12 percent to 24,283.11, S&P 500 gained 5.99 points, or 0.22 percent to 2,723.06 and the Nasdaq Composite rose 29.62 points or 0.39 percent to 7,561.63.
The index’s gains came amid the blue-chip stock average closed slightly below trading for 200 days, where investors are very concerned about those levels that are used as long-term momentum index.
In the local stock market, Jakarta Composite Index reported opened up 0.12 percent or 6.94 points at the level of 5,832.58. On Tuesday, the index closed down 0.57 percent to 5,825.65. Four of the ten sector indices ended in negative territory, with the finance and mining sectors leading the decline of 2.05 percent and 0.31 percent, respectively.
The weakness in the JCI tends to follow the majority of global exchanges that are almost entirely closed in the red zone. Foreign market players posted net selling of Rp453.06 billion (US$323,614).
Meanwhile, the fluctuations in oil prices also continue. Crude oil prices rose after industry reports reportedly showed the biggest decline in U.S crude reserves since September 2016.
West Texas Intermediate crude oil for August delivery traded at $70.68 a barrel, after closing at $70.53 a barrel on the New York Mercantile Exchange. The total volume traded is about 20 percent above the 100-day average.
Meanwhile, Brent oil futures for August contract rose $1.58 per barrel and ended at $76.31 per barrel on the London-based ICE Futures Europe exchange. Brent is trading at a premium of $5.78 with WTI.
WTI strengthened after the American Petroleum Institute reported U.S crude stocks fell 9.23 million barrels last week. This figure will be the biggest decline since September 2016 if the Energy Information Administration confirmed in its report Wednesday.
Blackouts at a refinery in Canada, combined with tensions in Libya and U.S pressure on allies to slash Iran in November pushed prices higher during Tuesday’s trading session. On the other hand, Saudi Arabia is said to plan to pump crude oil in its record highs in July, causing prices to drop for a moment.
In Libya, troops loyal to Khalifa Haftar, a commander in the eastern region of the country, handed over a port with a combined export capacity of 800,000 barrels per day to National Oil Corp. in Benghazi, a city in the east.
Looking for the current situation, we believed investors still worries on U.S – China trade war and stock sell-off continues. From domestic side, regional election and the improvement of the 2018’s State budget performance in May will influence market today.