USD/IDR: Rate cuts likely to be delayed given Rupiah weakness – TDS
|Economists at TD Securities analyze USD/IDR outlook ahead of Thursday’s Bank Indonesia meeting.
USD/IDR in an uptrend channel since early May
We expect Bank Indonesia to leave its 7-day reverse repo rate at 5.75%, extending its pause since February.
It’s a goldilocks scenario for BI with inflation continuing its retreat and GDP growth rising at a steady pace. Nevertheless, these benign developments are likely welcomed by BI though the weakness in IDR against the USD may nudge them to keep rate cuts off the table.
USD/IDR has been in an uptrend channel since early May and a break above the channel highs of 15,425 may trigger stronger verbal interventions from BI.
We think this USD strength may continue as liquidity is typically poor amid summer months and prefer to stay clear of the USD.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.