Sharpfokus08, why the rupiah will go back to 10k
As someone once said, to predict the future just look at the present & the past. The US$ index fall below 95 predicts rupiah will strengthen to below 10,000 again.
1. How it works $
Global economy
To me it's simple, from past experience, the US$ follows the global economy, which is driven by the US. Strong econonmy, weak $ & vice versa.
Trump & Brexit
The US is always the leader with maybe the U.K. a distant second. China nope. There's 2 major recent events in these 2 places. Trump & Brexit.
Deregulation
Trump & Bexit are full of unimportant noise. What's important is they both signal deregulation which will mean faster economic growth in future.
2. How it works Rp
Viscious/virtuous cycle
In Indonesia it's also simple. If the $ is strong, rupiah is weak & vice versa. Because we rely on most everything in US$ the effect is leveraged.
Jokowi pro growth
Making things even more leveraged here is even greater meddling & regulation. Jokowi is not great, but has done some deregulating to make things better.
Economy picking up
There are signs the domestic economy is picking up with faster growth as noted in previous Sharpfokus & when Indonesia grows ir grows very fast.
3. Why 10k new
Dollar index falls below 100
The sign of a weak global economy was the US$ index rising above 100 last year. So the 1st sign of improving was $ falling back below 100 in 2017.
Dollar index falls below 95
Although it hasn't had much press, the deregulating in the US is the fastest ever & the markets are noting, $ fell below the key 95 level last week.
1. How it works $
Global economy
To me it's simple, from past experience, the US$ follows the global economy, which is driven by the US. Strong econonmy, weak $ & vice versa.
Trump & Brexit
The US is always the leader with maybe the U.K. a distant second. China nope. There's 2 major recent events in these 2 places. Trump & Brexit.
Deregulation
Trump & Bexit are full of unimportant noise. What's important is they both signal deregulation which will mean faster economic growth in future.
2. How it works Rp
Viscious/virtuous cycle
In Indonesia it's also simple. If the $ is strong, rupiah is weak & vice versa. Because we rely on most everything in US$ the effect is leveraged.
Jokowi pro growth
Making things even more leveraged here is even greater meddling & regulation. Jokowi is not great, but has done some deregulating to make things better.
Economy picking up
There are signs the domestic economy is picking up with faster growth as noted in previous Sharpfokus & when Indonesia grows ir grows very fast.
3. Why 10k new
Dollar index falls below 100
The sign of a weak global economy was the US$ index rising above 100 last year. So the 1st sign of improving was $ falling back below 100 in 2017.
Dollar index falls below 95
Although it hasn't had much press, the deregulating in the US is the fastest ever & the markets are noting, $ fell below the key 95 level last week.
|
Clear path to 80 & below Rp10k
When you look at the chart you can see technically there's no $ support until 80 which would match with the rupiah strengthening back below 10,000. |
|
|
I'm probably being mean to Jokowi. I'm really a fan & here's a pic of me out shopping with him a couple of weeks ago,
Have a great week. Sebastian |
|