GBP/IDR Outlook:
The GBP/IDR rate is slightly positive but likely to move sideways as it is trading above its recent average and near the mid-range of its three-month span. This stability lacks a clear driver to significantly shift the outlook.
Key drivers:
• Rate gap: The Bank of England’s cautious stance on interest rates contrasts with the Indonesian central bank's interventions, impacting the GBP/IDR exchange rate.
• Risk/commodities: With ongoing volatility in oil prices, which affects global risk appetite, the IDR is feeling pressure as investors favor safer assets.
• One macro factor: Recent UK employment data, showing rising unemployment and slowing wage growth, may lead markets to foresee potential interest rate cuts by the Bank of England.
Range:
The GBP/IDR is expected to drift within its recent trading range without testing extremes in the short term.
What could change it:
• Upside risk: A surprise increase in UK inflation could bolster the GBP as markets potentially shift focus on interest rate hikes.
• Downside risk: Continued poor economic indicators from the UK could reinforce rate cut expectations, pressuring the GBP.