GBP/IDR Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average but lacks a clear current driver.
Key drivers:
• Rate gap: The Bank of England's dovish hold on interest rates contrasts with Indonesia's recent rate cut, impacting the GBP positively against the IDR.
• Risk/commodities: Recent high oil prices may support the Indonesian economy, but the overall demand for emerging market currencies like the IDR remains under pressure.
• One macro factor: Political uncertainties in both the UK and Indonesia continue to weigh on their respective currencies, complicating the outlook.
Range:
GBP/IDR is likely to hold within its recent range, oscillating but not breaking out.
What could change it:
• Upside risk: A surprising increase in UK GDP figures could enhance support for the pound.
• Downside risk: Continued capital outflows from Indonesia could further weaken the rupiah, impacting the exchange rate negatively.