USD/IDR Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Federal Reserve's decision to hold interest rates steady contrasts with Bank Indonesia's recent dovish policy shift, which has weakened the rupiah.
• Risk/commodities: Recent trends in oil prices are crucial, with volatility potentially affecting broader market risk, impacting the IDR as an emerging market currency.
• One macro factor: China's slower-than-expected economic recovery is affecting Indonesia's exports, further pressuring the IDR.
Range:
USD/IDR is likely to drift within its recent 3-month range, as it stays above the average but lacks strong momentum.
What could change it:
• Upside risk: A significantly stronger US labor market report could boost the USD further.
• Downside risk: Heightened geopolitical tensions or further capital outflows from Indonesia could pressure the rupiah.
