GBP/IDR Outlook: The outlook is likely to increase, supported by the pound's position above the 90-day average and near recent highs.
Key drivers:
• Rate gap: The Bank of England's cautious approach contrasts with Bank Indonesia's potential tightening measures, benefiting the GBP relative to the IDR.
• Risk/commodities: Recent fluctuations in oil prices have generally supported the GBP due to its significant ties to global markets, while Indonesia's reliance on commodities may add pressure.
• One macro factor: UK retail sales exceeding forecasts indicate economic resilience, shifting expectations for the Bank of England to maintain interest rates.
Range: GBP/IDR is expected to drift within the established 3-month range but may test recent highs due to favorable conditions.
What could change it:
• Upside risk: A significant improvement in UK economic data could further strengthen the pound.
• Downside risk: Renewed political uncertainties in the UK or continued pressures on the Indonesian economy could weaken the rupiah.