EUR/IDR Outlook:
The EUR/IDR is currently above its recent average and near the higher end of its 3-month trading range. This suggests a bullish outlook supported by recent economic data from the Eurozone.
Key drivers:
• Rate gap: The European Central Bank has maintained an accommodative stance, which has helped support the euro against the Indonesian rupiah.
• Risk/commodities: Oil prices are significantly above average, which can lead to inflationary pressures in Indonesia, further weakening the rupiah.
• One macro factor: The recent expansion in the Eurozone's manufacturing sector indicates growing economic strength, which could bolster the euro further.
Range:
The EUR/IDR is likely to hold within its stable recent range, although it may test the upper extremes if positive data continues.
What could change it:
• Upside risk: A significant improvement in the German business climate index could push the euro higher.
• Downside risk: Continued political instability in Indonesia may lead to a sharper depreciation of the rupiah.