US Dollar Faces Pressure as Fed Policy Expectations Shift

Dollar Index Decline Continues

The US dollar index (DXY) continued its decline on Wednesday (3/12/2025), falling 0.37% to 99.988 as market expectations of Federal Reserve rate cuts intensified ¹

Analyst Insights on Future Dollar Movement

Lukman Leong, analyst at Doo Financial Futures, noted that while the dollar remains under pressure, the potential for more significant weakening may materialize next year. Leong suggests that a potential reshaping of the Fed with appointees aligned with former President Trump could lead to further dollar depreciation. The current market dynamics indicate that while short-term pressure exists, more substantial dollar movement may be contingent on future political developments in the US.

Implications for Rupiah and Indonesian Market

The Indonesian rupiah's strengthening potential is currently limited due to these global currency fluctuations. While a weaker dollar typically creates a favorable environment for emerging market currencies like the rupiah, the limited room for further dollar weakening this year may cap the rupiah's upside potential. Market participants will be closely watching both Fed policy developments and global economic trends to gauge future currency movements.