GBP/IDR Outlook:
Bullish, as the GBP is trading above its recent average and is near recent highs influenced by economic news.
Key drivers:
• Rate gap: The Bank of England's dovish hints about future interest rate cuts contrast with Bank Indonesia's recent rate cut aimed at promoting growth, which pressures the IDR.
• Risk/commodities: The decline in oil prices has led to weakened demand for the IDR, impacting the currency negatively.
• One macro factor: Political concerns in Indonesia regarding the independence of its central bank are contributing to uncertainty around the IDR.
Range:
Expect the GBP/IDR to drift within its recent range as current conditions influence softer movements rather than sharp changes.
What could change it:
• Upside risk: A stronger-than-expected UK economic data release could boost the GBP further.
• Downside risk: Increased capital outflows from Indonesia could place further pressure on the IDR, leading to a GBP/IDR decline.