EUR/IDR Outlook:
The EUR/IDR is slightly weaker but likely to move sideways as it is below its recent average and near 30-day lows. The situation is influenced by ongoing geopolitical tensions and energy price instability.
Key drivers:
• Rate gap: The European Central Bank faces pressure from rising energy prices, while Bank Indonesia's proactive interventions aim to stabilize the IDR.
• Risk/commodities: Oil prices are significantly above average, contributing to inflation in the Eurozone, which negatively affects the EUR.
• One macro factor: Indonesia's government fiscal stimulus aims to support economic expansion amid global financial uncertainties, which could support the IDR.
Range:
The EUR/IDR is expected to hold within its recent 3-month range, showing limited movements with slight downward pressure.
What could change it:
• Upside risk: A de-escalation of geopolitical tensions could lead to renewed investor confidence in the EUR.
• Downside risk: Continued volatility in oil prices could further weaken the EUR against the IDR.