Indonesia GDP grows 5.02% YoY in Q3, USD/IDR stays on the backfoot
|- USD/IDR drops to 14,020 after Indonesia’s Q3 GDP figures beat estimates.
- Weak inflation, softer than the previous GDP still keeps BI’s another rate cut on the cards.
Given the better than forecast Gross Domestic Product (GDP) numbers Indonesian growth during Q3, USD/IDR drops to 14,018 while heading into European markets open on Tuesday.
As per the latest release from Statistics Indonesia, the Indonesian economy grew 3.06% versus 3.05% forecast and 4.20% prior to QoQ while also flashing 5.02% YoY growth figure compared to 5.01% expected and 5.05% earlier for the third quarter (Q3) 2019.
The pair earlier recovered on the Bank Indonesia’s (BI) October month Consumer Confidence data that arrived at 118.4 versus 121.8 booked in September.
BI Governor Perry Warjiyo recently said that there is room for the currency to strengthen even more while citing low inflation, 3.2% versus 3.32% prior and 3.29% forecast in October, and good economic prospects.
Investors will now look forward to November 20-21 monetary policy meeting by the BI in order to ascertain the near-term direction of the Indonesian Rupiah (IDR). In its October monthly meeting, the Indonesian central bank announced the fourth rate cut in a row.
Technical Analysis
In addition to the 50-day Exponential Moving Average (EMA) level around 14,105, a descending trend line since early-August, around 14,140, and 200-day EMA near 14,190 also question pair’s recovery. However, pair’s downside seems strong support around 13,970, a break of which could recall 13,880 on the chart.
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