Forecasts for EUR to IDR
The current EUR to IDR exchange rate stands at approximately 18,514, showcasing an increase of 1.0% above its three-month average of 18,338. Despite this gain, the euro's movement has been marked by considerable volatility, trading in a 12.9% range from 17,157 to 19,370. Analysts suggest that the euro's strength against the Indonesian rupiah (IDR) is partially attributed to the weakness of the US dollar (USD), underpinned by ongoing trade tensions, notably the recent tariffs imposed by the US on various countries, including Indonesia.
The euro itself has received support from speculation surrounding future interest rate cuts by the European Central Bank (ECB). Even though this speculation has capped further gains, the anticipated improvement in Eurozone private sector growth, as indicated by the latest PMI forecasts, may bolster the euro's position in the coming weeks. Economists are cautiously optimistic that these indicators could lend support to the currency as the week progresses.
In contrast, the IDR faces significant downward pressure, exacerbated by escalating trade tensions and a weakened fiscal outlook under President Prabowo Subianto's administration. After the US implemented reciprocal tariffs impacting Indonesian goods, the rupiah plummeted to historical lows against the dollar, surpassing previous lows set during the Asian Financial Crisis. This reflects a broader trend seen across emerging markets, where uncertainty stemming from global trade policies has led to increased volatility.
Additionally, currency performance is often sensitive to external factors, such as oil prices, since Indonesia is a major commodity producer. Recent data indicates that crude oil prices fell to an average of 64.74 USD, roughly 4.4% below its three-month average, highlighting potential challenges for the IDR. Should oil prices remain depressed, it could further strain the Indonesian economy, influencing the exchange rate negatively.
As the Eurozone navigates its economic recovery amid geopolitical tensions and a fragile energy market, while Indonesia grapples with trade and fiscal challenges, the outlook for the EUR to IDR exchange rate remains complex. Currency observers will be keeping a close eye on both macroeconomic indicators and political developments in both regions to gauge future movements.
