AUD/IDR Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average but lacks a clear driver.
Key drivers:
- Rate gap: The recent rate hike by the Reserve Bank of Australia (RBA) increases the interest differential favoring the Australian dollar over the Indonesian rupiah.
- Risk/commodities: Oil prices experiencing recent strength are likely to support demand for Australian exports, positively impacting the AUD.
- One macro factor: China's monetary policy remains supportive, bolstering demand for Australian commodities and lending some strength to the AUD.
Range:
Expect the AUD/IDR to hold within its recent range, drifting around current levels without significant movement.
What could change it:
- Upside risk: A strong Australian labor report could enhance the confidence in the AUD and boost its value.
- Downside risk: Increased capital outflows from Indonesia due to foreign investor concerns could further weaken the IDR and stabilize the AUD/IDR rate.