Market Expected to be Volatile Next Week Due to Geopolitical Tensions

RRI.CO.ID, Jakarta - Ongoing and escalating geopolitical conflicts are expected to broadly impact currency fluctuations, particularly the US dollar, and the prices of key global commodities such as crude oil and gold.

Currency market analyst Ibrahim Assuaibi said exchange rates and commodity prices will remain volatile in the coming week. “Market sentiment will primarily be influenced by developments in geopolitical conflicts, the direction of US Federal Reserve policy, and the trade war,” Ibrahim said in Jakarta on Sunday, July 26, 2026.

He noted that the trade war has resurfaced after President Trump announced additional import tariffs of 10 to 12.5 percent on 60 US trading partners, including Indonesia, following an investigation into labor regulations related to forced labor.

Meanwhile, conflicts between Iran and the US, as well as between Russia and Ukraine, are expected to continue. Tensions escalated after Ukraine attacked a Russian ship allegedly carrying military equipment to Iran in the Caspian Sea.

On the other hand, Ibrahim said the US has begun to scale back its attacks on Iran after oil prices neared USD 100 per barrel. “Because of the impact on jet fuel and gasoline prices in the US, there has been a corresponding rise in staple food prices,” he explained.

He added that the Trump administration fears rising food prices and inflation, especially ahead of the midterm elections, as poor economic conditions could be weaponized against Trump’s faction.

High inflation in the US will also influence the Fed’s policy direction. The central bank will hold a meeting next week to announce its interest rate policy. “The US central bank is likely to maintain high interest rates -- and may even raise them. This is what the market is worried about next week,” Ibrahim said.

Domestically, Ibrahim noted that rising crude oil prices will affect the State Budget. If oil prices exceed the budget assumption of USD 83 per barrel, demand for US dollars will increase. This coincides with the corporate dividend distribution season in the second half of the year, which will further strain the budget and put the rupiah at risk of weakening.

Based on his analysis, Ibrahim forecasts that the rupiah will again breach IDR 18,000 per USD next week. Meanwhile, the US Dollar Index (DXY) is expected to trade between 100.4 and 102.4.

The price of West Texas Intermediate (WTI) crude oil -- the global benchmark -- is likely to be USD 82.6 per barrel, with a chance of breaking through USD 102.8 per barrel next week.

As for gold, if prices rise, they are expected to move within USD 4,148–4,240 per troy ounce, translating to IDR 2.68–2.74 million per gram. If global gold prices weaken, they are projected to range from USD 3,968–3,871 per troy ounce, with domestic prices between IDR 2.44–2.59 million per gram. (Gusti Panji)