JAKARTA (TheInsiderStories) – A wave of optimism for global economic resilience emerged despite an escalation of United States (U.S) – China trade war and divisions in the British Government on Brexit.
This convinced investors who have not witnessed a real slowdown cause of the global trade barriers and give a positive influence to the financial markets. Analysts said, investor has been aware of trade war for more than a month and allowing the market to move higher.
Data published on Monday (09/07) also showed that German exports grew more than expected in May, slightly easing investors’ concerns over the trade war. This time the market players turned back for a moment to not focus on trade war issues.
Indonesia, as one of the largest economy in Southeast Asian also set a counter-measures to mitigate uncertainties by the trade war. U.S’s President Donald Trump has said it will review the Generalized System of Preferences (GSP) facility for trading partner countries, including 124 products from Indonesia. If the GSP facility for Indonesia is changed, then Indonesian export products are potentially subject to higher import duty tariffs to the US
On Monday (10/07) at the Bogor Palace, Industry Minister Airlangga Hartarto told reporters the government will use fiscal’s tools to protect the domestic economy from the trade war impact. He said, President Joko Widodo in the limited meeting asked the ministers to safe the local industries, curb raw material import demands, and boost tourism.
President also urged the ministers to harmonize customs and import duties, provide a guarantee of the availability of raw materials and give incentives for export, provide incentives to small and medium businesses, increases the utilization of local content, and upgraded the availability of raw materials in the country.
The government will soon establish a special task force in formulating export and import policies. One of the tasks of these units is to determine what types of imported goods are likely to be selected.
According to U.S data, in the first five months this year, the country booked US$5.75 billion in deficits, compared with $13.35 billion for the whole of last year. The U.S is a major trading partner for Indonesia, whose non-oil and gas exports to that country accounted for 11 per cent of total exports in the first quarter, making the U.S the second-largest destination after China.
With regard to the threat of trade warfare by the U.S, the Europrean Union (EU) is split in dealing with the trade war that Trump waged. Chancellor Angela Merkel said it would support the decline in EU levies on imports of cars from the U.S.
But France garnered support from other E.U countries, in response to the imposition of high U.S import tariffs for products from the EU. Meanwhile, Germany’s desire to reduce tariffs on imports of automotive products from the U.S, hampered by the World Trade Organization rules.
Meanwhile, OPEC and its allies are doing all they can to keep up with the shortage of crude output that makes tight supplies and high prices, but they do not want to overdo it.
This was expressed by United Arab Emirates Energy Minister Suhail Al Mazrouei in response to Trump’s request for OPEC to do more. He said it was important to avoid the market to the time of excessive supply that triggered a fall in prices.
Oil futures traded near the highest level in three years following disruptions in Canada and Libya, along with slumping production in Venezuela and a U.S call to halt purchases from Iran, overshadowing the promise of OPEC and its allies to add 1 million barrels per day.
Today, Rupiah opened up 12 points or 0.08 percent at the level of Rp14.318 per U.S dollar. Yesterday, the local currency was able to end up higher in line with the weakening U.S dollar index.
The Rupiah closed up 45 points or 0.31 percent at the level of Rp14.330 compared to the American dollar. As on Friday (06/07), the Rupiah ended up 0.13 percentor 19 points at Rp14,375 levels.
Similar tith the Eupiah, the majority of Asian currencies also rose on Monday, led by an offshore Chinese yuan that up 0.54 percent, followed by Taiwan’s appreciated 0.46 percent and Chinese renminbi up 0.36 percent.
Meanwhile, the U.S dollar index movement that measures the strength of the greenback against a number of major currencies was observed to weaken 0.16 percent or 0.146 points to 93.817 at 17.01 WIB from previous day closing down 0.46 percent or 0.432 points at 93.963 on Friday.
Marked by a potential rise in global stock markets, following U.S stocks rose again on Monday. It opened up opportunities for the Jakarta Composite Index (JCI) to continue the increase. JCI movement today predicted further bullish post-significant rise in trading on Monday.