- USD/IDR jumps to 29-month high even as BI official accepts "triple intervention".
- Indonesia also seeks less exposure to the US dollar, considers diversifying loans to state-owned enterprises.
- Broad risk-off mood, firmer yields underpin US dollar gains.
- Fed Chair Powell eyed for further upside momentum, EU energy crisis eyed as well.
USD/IDR grinds higher around the 2.5-year high near $15,250 ahead of Wednesday’s European session. In doing so, the Indonesia rupiah (IDR) justifies the latest news from the Bank Indonesia (BI), as well as the risk-aversion wave.
Indonesia's central bank has continued with its "triple intervention" to guard against excessive falls in the rupiah exchange rate, with a focus on intervening in the domestic non-deliverable forward market, an official said on Wednesday, per Reuters. The news also quotes Edi Susianto, head of Bank Indonesia's monetary management department, while saying, “The central bank would also continue to conduct "operation twist" in the bond market with a focus on selling short-term bonds.”
It was also mentioned that the Asian nation might diversify its loan from the US dollar amid the latest jump in the greenback. “Indonesia is considering diversifying its loans for state-owned enterprises with foreign currencies other than the U.S. dollar, amid the declining rupiah,” mentioned Reuters.
Elsewhere, comments from the White House (WH) Economic Adviser Brian Deese and San Francisco Fed President Mary Daly, not to forget pessimism emanating from China and Europe, seemed to have weighed on the market sentiment. WH Economic Adviser Deese’s comments that he does not anticipate the need for the global accord to adjust currency values seemed to have pleased the US dollar bulls of late. The policymaker also stated, “I'm fundamentally optimistic about the US economy, which can emerge stronger than before the pandemic.”
While portraying the mood, the US Dollar Index (DXY) renews the 20-year high near 114.70 while the US 10-year Treasury yields jump to 4.0% for the first time since 2010. Amid these plays, the S&P 500 Futures drop 0.50% intraday to poke the 21-month low marked the previous day.
Technical analysis
The year 2018 swing high near $15,265 appears a tough nut to crack for the USD/IDR bulls amid overbought RSI. The bulls, however, remain hopeful unless the quote remains beyond the previous resistance line from April 2021, currently around $15,090.
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