EUR/IDR Outlook:
Slightly positive, but likely to move sideways as the rate is above the recent average and lacks a clear driver.
Key drivers:
• Rate gap: The European Central Bank has maintained its interest rate while Bank Indonesia's recent rate cut indicates a dovish approach, putting pressure on the rupiah.
• Risk/commodities: Oil prices are trading above their average, which can support the euro's strength, benefiting from higher energy revenues for Europe.
• One macro factor: Political concerns regarding the independence of Indonesia's central bank have raised apprehensions among investors, contributing to the weakness of the rupiah.
Range:
The EUR/IDR is expected to drift within its recent range.
What could change it:
• Upside risk: A significant improvement in Eurozone economic indicators could strengthen the euro.
• Downside risk: An escalation in political uncertainty in Indonesia could further weaken the rupiah.