EUR/IDR Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average yet lacks a strong distinct driver.
Key drivers:
• Rate gap: The European Central Bank’s neutral stance on interest rates contrasts with Bank Indonesia's recent cut, which is aimed at stimulating economic growth.
• Risk/commodities: The recent peak in oil prices may support the euro, as higher oil prices often influence European inflation and economic stability.
• One macro factor: Positive consumer sentiment in Germany could provide some support to the euro if it continues to improve, reflecting rising confidence in the Eurozone's economy.
Range: Movement in EUR/IDR is likely to hold within the recent range, given its current level above the 90-day average and general market stability.
What could change it:
• Upside risk: An unexpected improvement in economic data from the Eurozone could boost the euro significantly.
• Downside risk: A prolonged economic downturn in Indonesia or further protests could weaken the Indonesian rupiah, thereby impacting the EUR/IDR exchange rate negatively.
