Bias: USD/IDR is above its ninety-day average and sits in the upper half of the three-month range, biasing to bullish-to-range-bound.
Key drivers:
• Rate gap: Markets expect the US Fed to ease toward a neutral stance in the coming year, while Bank Indonesia has shown willingness to ease in the past, keeping policy divergence in play.
• US payrolls data: The latest jobs report showed unemployment falling, supporting the dollar and potentially capping IDR strength.
• Macro factor: Indonesia's economy remains resilient with a trade surplus, but weaker foreign inflows into government bonds pressuring the rupiah.
Range: USD/IDR is likely to drift within the three-month range, with potential tests of the upper end if US data stays firm, and local liquidity conditions may cap moves.
What could change it:
• Upside risk: stronger US data or a Fed stance signaling higher rates could lift the dollar and push USD/IDR higher.
• Downside risk: softer US data or clearer Fed easing signals could weigh on the dollar and support IDR.
