AUD/IDR Outlook:
The outlook for AUD/IDR is bullish as the rate is significantly above its recent average and near recent highs, supported by a strong commodity demand.
Key drivers:
• Rate gap: The Reserve Bank of Australia recently raised interest rates, enhancing the attractiveness of the AUD compared to the lower rates set by Bank Indonesia.
• Risk/commodities: With rising demand for key Australian exports, particularly in commodities like iron ore, the AUD has strengthened, benefiting from current market conditions.
• Macro factor: Australia’s inflation rate exceeded expectations, increasing speculation for further monetary tightening by the RBA, which is supporting the AUD.
Range:
Expect AUD/IDR to hold within its recent 3-month range amidst market volatility but generally leaning towards higher movement.
What could change it:
• Upside risk: An unexpected jump in commodity prices could drive the AUD even higher.
• Downside risk: Any significant shifts in global investor confidence or further capital outflows from Indonesia could weaken the IDR against the AUD.