GBP/IDR Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Bank of England's cautious stance on rate cuts contrasts with the recent rate reduction by Bank Indonesia, affecting GBP's strength against IDR.
• Risk/commodities: Ongoing oil price fluctuations can influence trade balances and economic activity, indirectly impacting both currencies.
• Economic resilience: Indonesia’s strong manufacturing activity is helping to sustain the IDR, despite challenges from declining foreign inflows.
Range: The GBP/IDR is likely to hold steady within the recent trading range, given its position above the average.
What could change it:
• Upside risk: A significant rebound in UK economic data could lead to a stronger GBP.
• Downside risk: Continued tensions over US tariffs affecting the UK economy may pressure the GBP lower.