EUR/IDR Outlook: The outlook for EUR/IDR is bullish as the rate is currently above its recent average and near recent highs, supported by robust euro demand.
Key drivers:
• Rate gap: The European Central Bank is maintaining a neutral stance, while Bank Indonesia has cut interest rates to stimulate growth, widening the interest rate differential in favor of the euro.
• Risk/commodities: Recent oil price trends showing upward movement support the euro as higher energy costs can influence inflation in the Eurozone, affecting currency value positively.
• One macro factor: A significant improvement in the ZEW economic sentiment index in Germany could bolster the euro further if it continues to demonstrate a positive economic outlook.
Range: EUR/IDR is expected to hold steady within its recent trading range as market conditions stabilize, although there may be opportunities to test recent highs.
What could change it:
• Upside risk: Strong eurozone economic data, especially from Germany, could push the euro higher against the rupiah.
• Downside risk: Further rate cuts by Bank Indonesia or increasing domestic unrest could weaken the Indonesian rupiah and pressure the EUR/IDR exchange rate more.
