Rupiah exchange rate until today's market close against the United States dollar. Until this succeeded in making the US Dollar move away at a level below Rp. 15,500. This is the impact of Bank Indonesia taking advantage of the FED's lack of focus on currency but inflation.

Data from Reuters on Monday's trading (14 November 22), at the time of market closing, the US Dollar was at around Rp. 15,300. This figure is a good thing, especially when the dollar price on the IDR/USD market is still around Rp. 15,700 and above.

The latest data also makes the Rupiah one of the strongest currencies on Monday's market. The US dollar is still receiving economic shocks from several other countries, and inflation in America is not something they can take lightly.

It is stated that the US Dollar firm is more focused on softening its fights against inflation. And because of this impact analysis, the FED is not too concentrated on its currency. Apart from the Rupiah, Ringgit, Rupee, and also the Yen are Asian currencies that are strengthening.

FED Cautions on Inflation and Pushes Back on Rate Bets, but It's Not 'Softening' Inflation

Federal Reserve Governor Christopher Waller said that the Central Bank is currently not focusing on the currency sector. They are more focused on determining the actions for their fight against inflation. So less aggressive rate hikes from the FED may appear.

US inflation is also predicted to likely remain high and keep the FED on a monetary tightening path. Meanwhile, US consumer sentiment also dropped dramatically in November. They are drawn by citizens' persistent worries about inflation and higher borrowing costs.

And because of this, the US Federal Reserve began to consider slowing the pace of rate increases at its next meeting. However, according to Christopher Waller, this bold policy will not positively impact the US.

He said that slowing the pace of rate hikes in the future would not be able to soften inflation. He asked to focus more on the endpoints of each market, including starting to review the series of monetary policies so we can get inflation down out there.

Meanwhile, Carol Kong, a currency strategist from Commonwealth Australia, also gave her opinion regarding what the FED needs to do in this condition. Looking at the statement he passed, Carol Kong agrees with Christopher Waller regarding the slowing rate.

"I think the market got a little bit ahead of itself," he said, adding a reality check from FED officials. "US inflation will likely remain high, and the FED should only stay on its monetary tightening path.He also found a way off for the Dollar by saying that a slower pace for softening inflation could be better. The data point is still the endpoint for getting inflation down, although there are still many ways to get out of this; it depends on inflation.

'Calm Down,' but Can FED Warns the Market and Strengthens in 2023?

Meanwhile, Treasury yields rose to strengthen the Dollar, pushing back, which is becoming a debate now, making many questions the fate of the US economy in 2023. FED's optimism for a rate hike, even at a low rate, is easy to anticipate, and this is an economic gauge.

The market has not completely calmed down, and loosening financial conditions are considered not a good way to fight inflation. So if this condition continues, the Dollar could continue to weaken, including against the Rupiah market.

While many looks for a deficit in the second half of 2022, pressure on the US market is starting to show a confluence factor. Rate hikes will occur shortly for the FED but at a lower rate. However, this condition also made Rupiah take advantage of the opportunity.