USD/IDR drops to fresh 23-month low amid USD weakness, headlines from Natuna
- USD/IDR registers six-day losing streak.
- China’s retreat from Natuna shows Indonesia’s ability to push back the dragon nation’s drive to capture Asian waters.
- USD/IDR slumped Friday amid calls of Bank Indonesia’s readiness to strengthen Indonesian rupiah (IDR), downbeat US employment data.
After hitting the lowest since February 2018, with an intra-day bottom of 13,618, USD/IDR declines to 13,710 during early Monday.
Indonesia’s ability to push back Chinese vessels from the exclusive economic zone (EEZ) in the North Natuna Sea seems to please the USD/IDR buyers recently.
The pair dropped Friday after the US employment report portrayed a downbeat performance in December. Adding to the greenback’s weakness was optimism surrounding the US-China trade deal and receding risks of the US-Iran war.
Also contributing to the pair’s weakness were comments from Bank Indonesia’s (BI) Nanang Hendarsah, executive director for monetary management. The BI member said that the central bank will allow the rupiah to strengthen in line with market movements, but will not target any level.
It should also be noted that the market’s recent risk-on seems to help the ex-US dollar currencies, especially the Asian ones on the US-China trade deal optimism. With this, S&P 500 Futures register 0.25% gains to 3,274 by the press time.
While Indonesia calendar is mostly empty during the week, except for Wednesday’s trade details, the US data and trade/political headlines will be the key to watch.
Technical Analysis
Pair’s break below 200-week SMA level of 13,780 pleases the Bears. Odds of further downside 2018 low surrounding 13,270 can’t be ruled out.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
