- USD/IDR sticks to mild losses for the second consecutive day as Indonesia Retail Sales growth eases.
- Broad US Dollar weakness amid Fed concerns, China news weighs on Indonesia Rupiah.
- US CPI, Fed bets and risk catalysts eyed for clear directions.
USD/IDR holds lower ground near 14,858 as it drops for the second consecutive day amid broad US Dollar weakness. In doing so, the pair ignores downbeat Indonesia Retail Sales. It’s worth noting, however, that the Indonesia Rupiah (IDR) struggles to extend the two-day downtrend amid cautious markets ahead of the US Consumer Price Index (CPI) data for the stated month.
That said, Indonesia Retail Sales for April report a softer growth of 1.5% versus 4.9% previous readings.
On the other hand, US Dollar Index (DXY) snaps a two-day uptrend with a 0.30% intraday loss to near 103.32 by the press time. In doing so, the greenback’s gauge versus six major currencies bears the burden of the downbeat bets on Wednesday’s Federal Open Market Committee (FOMC) monetary policy meeting.
Softer US data and unimpressive Fed talks allow traders to remain dovish on the US central bank. While portraying the same, the CME’s FedWatch Tool suggests more than a 70% chance of the Fed’s inaction on Wednesday while suggesting nearly 80% odds favoring the 0.25% rate increase in July.
It should be noted that the upbeat sentiment in the Asia-Pacific zone, mainly due to the People’s Bank of China’s (PBoC) rate cut, exert downside pressure on the USD/IDR price.
Against this backdrop, the S&P500 Futures print mild gains at the highest level since April 2022, marked the previous day, whereas the US 10-year and two-year Treasury bond yields register minor downside during the second consecutive day to around 3.72% and 4.56% in that order.
Moving on, the USD/IDR pair traders should keep their eyes on the US Consumer Price Index (CPI) figures for May as it bears the market forecasts of witnessing no change in the Core CPI MoM figure of 0.4%. The same could push back the July rate hike concerns and may not allow the Fed to sound hawkish, which in turn keeps the pair sellers hopeful.
Technical analysis
Repeated failure to cross the 21-DMA hurdle, currently around 14,910, keeps USD/IDR bears hopeful.
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