Bi left its policy rate unchanged – UOB

Pablo Piovano FXStreet

UOB Group’s Head of Research Suan Teck Kin and Junior Economist Angus Santoso comment on the latest BI monetary policy meeting.

Key Takeaways

Bank Indonesia (BI) kept its benchmark policy rate (7-Day Reverse Repo) unchanged at 5.75% following its Jun MPC meeting, in line with consensus and our expectations.

BI remains of the view that inflation expectations are “well-anchored” and it expects headline inflation to return to BI’s target range of 2-4% by 3Q23. Jun’s inflation continued to ease and rupiah remains the strongest currency in Asiayear-to-date.

Today’s MPC decision also stated that BI will increase the frequency and tenor of TD DHE auctions with more competitive rates as an extra policy to anchor rupiah stability. We keep our view for the rate cut cycle to start in 1Q24. The key catalysts for the start of the rate-cutting cycle would be a consistently declining inflation towards its target range, a more anchored and persistent stability of the rupiah, and an increasing need to support the growth momentum ahead.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1870 during the Asian hours on Friday. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming steady momentum. RSI has eased but remains above 50, indicating momentum remains constructive for the bulls.

GBP/USD consolidates around 1.3600 vs. USD; looks to US CPI for fresh impetus

The GBP/USD pair remains on the defensive through the Asian session on Friday, though it lacks bearish conviction and holds above the 1.3600 mark as traders await the release of the US consumer inflation figures before placing directional bets.

Gold recovers swiftly from weekly low, climbs back closer to $5,000 ahead of US CPI

Gold regains positive traction during the Asian session on Friday and recovers a part of the previous day's heavy losses to the $4,878-4,877 region, or the weekly low. The commodity has now moved back closer to the $5,000 psychological mark as traders keenly await the release of the US consumer inflation figures for more cues about the Federal Reserve's policy path.