The EUR to IDR exchange rate currently shows a range-bound bias.
Key drivers include:
- Interest rate differentials, as the European Central Bank remains flexible, closely monitoring economic data, while Bank Indonesia is intervening to stabilize the rupiah amidst global pressures.
- Indonesia's inflation target of 2.62% for 2026 suggests a cautious economic backdrop, contrasting with potential Eurozone GDP growth of 1.6% driven by fiscal measures.
- Oil prices remain elevated at 30-day highs, which could impact trade balances and inflation rates, influencing both currencies.
The near-term expected trading range is likely to remain within narrow limits, reflecting recent stability levels.
An upside risk for the EUR could arise from improved Eurozone growth or a resolution of geopolitical tensions, bolstering confidence in the euro. Conversely, a downside risk may stem from continued depreciation of the IDR due to monetary policy or external economic shocks, which could further depreciate the currency against the euro.