*
IDR eases after report US trade deal at risk of collapse
*
Indonesia official says tariff talks with U.S. still
ongoing
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Investors await Federal Reserve outlook for next year
By Shivangi Lahiri
Dec 10 (Reuters) - The Indonesian rupiah weakened on
Wednesday, while other Asian currencies and equities trod water
as investors globally awaited guidance from a potentially
divided U.S. Federal Reserve policy board later in the day.
The Indonesian rupiah eased as much as 0.2% to 16,693
per dollar. It has weakened about 3.5% so far this year, making
it one of the worst performers in Asia.
Among other currencies in the region, the Malaysian ringgit
and South Korea's won edged down 0.2% and
0.1%, respectively.
A U.S. official said on Tuesday a trade agreement reached
with Indonesia in July was at risk of collapsing after Jakarta
backtracked on several commitments it made as part of the deal.
An Indonesian government official said on Wednesday the
tariff talks were still ongoing with no specific issues arising
during the negotiations.
Investor sentiment towards Indonesian assets has remained
broadly positive, supported by stronger government backing,
including a 16.23 trillion rupiah ($973.02 million) stimulus
package unveiled this year under new Finance Minister Purbaya
Yudhi Sadewa and liquidity support for state-owned banks.
An improving growth outlook and the February launch of
Danantara, a $20-billion state fund to boost domestic
investment, have further underpinned investor confidence.
Equities in Jakarta, which have hit multiple record
highs over the last two weeks, rose 0.4%.
"I believe the market is more immune to the noise from the
trade deal unless there is more visibility on the potential
impact," said Ernest Chew, head of ASEAN equities at BNP Paribas
Asset Management.
"Investors remain constructive on Indonesia because the
domestic backdrop is still doing a lot of heavy lifting."
Among stock markets, Malaysia and the Philippines
declined 0.3% and 0.6%, respectively.
With markets pricing in a more than 89% probability of a
25-basis-point Federal Reserve interest rate cut later in the
day, the spotlight is squarely on its outlook for 2026.
The Fed meeting this week has shaped up to be one of its
most contentious in years, with five of the 12 voting members on
the Federal Open Market Committee having already signalled
opposition or scepticism towards additional easing.
Analysts at MUFG continue to see a hawkish 25-bp cut and
potential for a somewhat divided decision, given the lack of
clarity on U.S. macro numbers so far.
Thailand's baht was flat, while the stock market
was closed for a public holiday.
($1 = 16,680.0000 rupiah)
HIGHLIGHTS:
** Trump says to make phone call to stop Thai-Cambodia fighting
** US backs Japan in dispute with China over radar incident
** Twelve killed in residential fire in southern China, Xinhua
reports
** South Korea's Lee calls for probe into links between
religious group and politics
Asia stock indexes and currencies at 0452 GMT
COUNTRY FX RIC FX DAILY FX YTD INDEX STOCKS STOCKS
% % DAILY YTD %
%
Japan +0.16 +0.36 -0.084 28.76
China India +0.11 -4.64 0.28 9.58
Indones -0.12 -3.54 0.42 22.79
ia
Malaysi -0.15 +8.47 -0.29 -2.00
a
Philipp -0.02 -1.92 -0.61 -9.02
ines
S.Korea Singapo +0.06 +5.32 -0.32 18.77
re
Taiwan -0.01 +5.01 0.80 23.32
Thailan 0.00 +7.79 - -9.31
d
(Reporting by Shivangi Lahiri in Bengaluru; Editing by
Subhranshu Sahu)
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