USD/IDR Price News: Rupiah retreats from 11-month high to 14,700 amid mixed Indonesia Inflation

USD/IDR justifies downbeat Indonesia inflation while bouncing off an 11-month low to 14,710 heading into Tuesday’s European session. In doing so, the Indonesia Rupiah pair fails to cheer a retreat in the US Dollar prices amid a sluggish session due to the mixed sentiment and anxiety ahead of the key data/events.

Indonesia’s headline Inflation eased to 4.33% YoY in April from 4.97% prior and 4.39% market forecasts while the monthly inflation figures came in mixed to 0.33% versus 0.37% expected and 0.18% prior. Further, the Core Inflation eased to 2.83% during the stated month from 2.89% analysts’ estimation and 2.94% prior.

Reuters released Statistics Indonesia chief Margo Yuwono’s comments after the Inflation data as saying, “Higher transportation fares and prices of fuel and some food commodities around the Islamic holy month of Ramadan contributed to April's inflation,” the policymaker also added, “although the increase was more benign than the Ramadan month in previous years.”

On the same line, Indonesia's Finance Minister (FinMin) Sri Mulyani Indrawati, also the governor of Bank Indonesia (BI), said recently that growth in the ASEAN region remains robust and continues to be an important component for global economic growth.

Elsewhere, markets in the Asia-Pacific region remain cautiously optimistic after the International Monetary Fund (IMF) anticipated them to be the most dynamic of the world's major regions in 2023, per the latest reports.

It should be noted, however, that talks surrounding the US default seem to challenge the market’s previously US Dollar positive bias. That said, US Treasury Department renewed fears of US default by pulling forward the date of running out of funds to match obligations if the current debt ceiling isn’t altered, to June 01 from previously signaled July.

On the other hand, relief from the US First Republic Bank issue allowed traders to take a breather as the US regulators seized assets of the First Republic Bank and sold them to a new buyer, namely JP Morgan. The same could be held responsible for the USD/IDR pair’s hesitance in rallying much. Furthermore, Axios came out with headlines suggesting the US allies’ preparations for the US-China war over Taiwan, which in turn keeps the Euro bears hopeful, via the US Dollar’s haven demand.

Moving on, the US Factory Orders for March, expected to rise by 0.8% MoM versus -0.7% prior, may entertain USD/IDR traders ahead of this week’s Federal Reserve (Fed) monetary policy meeting and the US jobs report for April.

Technical analysis

USD/IDR recovers from a lower line of the two-month-old descending triangle, currently near 14,615, backed by the oversold RSI (14) line. The recovery moves, however, need validation from the stated triangle’s top line, close to 14,885 at the latest, to convince the pair buyers.