GBP/IDR Outlook:
The GBP/IDR rate is slightly weaker but likely to move sideways as it trades near its recent average and has encountered uncertain pressure from various economic factors.
Key drivers:
• Rate gap: The Bank of England has held rates steady, while Indonesia's fiscal policies are facing scrutiny, impacting their respective currencies differently.
• Risk/commodities: Recent volatility in oil prices, which have trended above average, tends to support the rupiah, drawing attention away from the pound.
• One macro factor: Political uncertainty in the UK due to speculation around upcoming elections may hinder GBP performance, while ongoing protests in Indonesia affect the rupiah's stability.
Range:
Expect the GBP/IDR to generally hold within its recent range as both currencies face headwinds without clear directional drivers.
What could change it:
• Upside risk: A surprising rebound in UK economic data could bolster the pound against the rupiah.
• Downside risk: Further political instability in the UK may increase selling pressure on the pound.
