EUR/IDR Outlook:
The EUR/IDR exchange rate is likely to decrease, as it is currently trading near its recent lows and below its 90-day average. The ongoing geopolitical tensions are pressuring the euro.
Key drivers:
• Rate gap: The European Central Bank faces challenges from higher energy prices and weaker growth, while Bank Indonesia is actively intervening to support the rupiah.
• Risk/commodities: Rising oil prices are affecting the euro negatively, as the Eurozone is a major energy importer, increasing inflation risks.
• One macro factor: Indonesia's government announced a significant fiscal stimulus to bolster economic growth, which may further support the IDR.
Range:
The EUR/IDR is likely to drift within its recent range as market factors stabilize.
What could change it:
• Upside risk: A de-escalation in geopolitical tensions could boost euro confidence.
• Downside risk: Continued escalation in Middle East conflicts may weaken the euro further.