Bias: AUD/IDR is bullish-to-range-bound, above its 90-day average and in the upper half of the three-month range, suggesting room to move within the range but no clear breakout.
Key drivers:
- Rate gap: The RBA signaled potential rate hikes in 2026, while BI has leaned looser in the recent cycle, keeping a favorable gap for AUD.
- Macro factor: China’s uneven rebound dampens demand for Australian commodities, tempering the AUD’s upside while policy chatter at home keeps some support.
- Risk/commodities: Commodity price trends, especially iron ore and energy, influence export income and risk appetite, so sustained rallies help the AUD while pullbacks weigh.
Range: AUD/IDR is expected to hold near the upper end of the three-month range, with a gentle drift and limited moves unless new data shifts policy expectations.
What could change it:
- Upside risk: clearer signs of RBA tightening in 2026 could widen the rate gap and lift AUD.
- Downside risk: softer Australian inflation data delaying hikes may narrow the rate gap and weigh on the AUD.
