The USD to IDR exchange rate shows a bullish bias due to decreasing unemployment in the U.S. and a recent rate cut by Bank Indonesia.
The Federal Reserve's interest rate expectations remain pivotal, with forecasts hinting at one to two rate cuts that could maintain U.S. rates near 3.00%–3.25%. This contrasts Bank Indonesia's recent decision to lower its benchmark rate to stimulate growth, creating a widening interest rate differential favoring the USD. Additionally, geopolitical tensions in the U.S. may enhance demand for the dollar.
The near-term trading range for USD to IDR is expected to hold relatively stable, reflecting the 1.9% fluctuation observed recently. Upside risks could stem from stronger U.S. economic data that would bolster dollar strength. Conversely, renewed market unrest in Indonesia or unexpected rate policies from Bank Indonesia could pressure the rupiah and shift the exchange rate lower.