USD/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 Federal Reserve is expected to cut rates, while Bank Indonesia has already reduced its rate to support economic growth, creating a widening rate gap that may weaken the USD against the IDR.
• Risk/commodities: Oil prices are exhibiting volatility, which could influence Indonesia's trade balance and, consequently, the IDR's strength.
• One macro factor: Market reactions to President Trump's recent tariff threats have added uncertainty to the USD outlook, potentially affecting foreign investment.
Range: The USD/IDR is likely to hold steady within the recent range, as the current rate is relatively stable compared to its recent fluctuations.
What could change it:
• Upside risk: Renewed foreign investments in the U.S. following economic data releases could strengthen the USD.
• Downside risk: If economic concerns about U.S. tariffs escalate, it could lead to further depreciation of the USD against the IDR.
