International News 17/12
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Iran's currency slumps to new lows amid US-European tensions
On Saturday, the Iranian currency, the rial, reached a new all-time low against the US dollar. The decline can be attributed to the current climate of uncertainty surrounding Donald Trump's leadership and the ongoing tensions with the West regarding Iran's nuclear programme. The rial fell to 756,000 against the dollar on the unofficial market, representing a decline from the 741,500 rials recorded on Friday. In response to the declining value of the rial, many Iranians are seeking alternative forms of savings, with a notable shift towards purchasing dollars, other hard currencies, gold, or cryptocurrencies. This trend points to further challenges for the rial in the near term. The dollar has been gaining strength against the rial since November, when it was trading at approximately 690,000 rials. Further contributing factors include concerns over the potential re-imposition of tougher sanctions by Trump and the empowerment of Israel to attack Iran's nuclear sites. The decline in Iran's currency was also exacerbated by the passing of a European-proposed resolution against Tehran by the board of governors of the UN nuclear agency IAEA, increasing the risk of new sanctions, and the fall of Syrian President Bashar al-Assad, a long-time ally of Iran.
Rupiah Lunglai to IDR16,016 with Other Asian Currencies
On Monday, the rupiah exchange rate opened at IDR 16,016 per US dollar, representing a 0.05% decline from the previous trading session. Other Asian currencies also saw declines, with the South Korean won, Philippine peso, Thai baht and Malaysian ringgit all weakening in value. However, the Chinese yuan and Japanese yen also saw a decline in value, while the Singapore dollar and Hong Kong dollar demonstrated an increase. In contrast, currencies from developed countries, including the British pound sterling, Australian dollar, euro, Canadian dollar, and Swiss franc, all demonstrated strength. Analyst Lukman Leong forecasts that the rupiah will remain under pressure from the US dollar as the likelihood of interest rate cuts by the US Federal Reserve diminishes. This outlook is influenced by the increase in US bond yields and the possibility of fewer interest rate cuts by the Fed next year.
World Crude Oil Prices Fall Ahead of Fed Rate Announcement
Crude oil prices fell slightly as investors awaited the US Federal Reserve's meeting to determine the possibility of further interest rate cuts. The decline was limited by concerns about supply disruptions due to potential US sanctions against major oil suppliers such as Russia and Iran. Brent crude oil futures fell 0.3% to US$74.28 per barrel and US West Texas Intermediate crude oil futures fell 0.4% to US$70.99 per barrel. The threat of new US sanctions on entities trading Iranian oil has led to higher prices for crude oil sold to China. In addition, the administration of President-elect Donald Trump is expected to put more pressure on Iran. Recent interest rate cuts by central banks in Canada, Europe and Switzerland, as well as expectations of a rate cut by the Federal Reserve, have also supported oil prices. The US Federal Reserve meeting is expected to determine the extent of the rate cut.