The exchange rate forecast for USD to IDR reflects a mix of pressures and developments affecting both currencies. Recent analysis indicates that the US dollar is trading near 14-day lows at approximately 16,652 IDR, just above its three-month average, which suggests a relatively stable range of fluctuation between 16,272 to 16,763 IDR. The USD has faced downward pressure due to a changing sentiment regarding Federal Reserve rate policy, notably with the probability of a rate cut in December reaching 75%. Analysts believe this dovish shift, alongside optimism regarding geopolitical tensions such as a potential Ukraine-Russia peace deal, is fuelling a softening demand for the USD.
Compounding these factors, markets are closely watching upcoming economic data, particularly retail sales figures, which may further dampen USD demand if growth indicators show weakness. Additionally, the ongoing discussions about U.S.-China trade relations and concerns over global dedollarization efforts are having a notable influence on the dollar’s value.
In contrast, the Indonesian Rupiah is experiencing a more complex situation. Following a surprise rate cut by Bank Indonesia in September, which reduced the benchmark rate to 4.75%, some initial optimism was present. However, significant political uncertainty, particularly arising from the dismissal of Finance Minister Sri Mulyani Indrawati, led to a drop in the rupiah value despite the central bank's interventions in the financial markets aimed at stabilizing the currency. Analysts point out that Bank Indonesia's actions in both domestic and offshore markets, including bond purchases, have temporarily supported the IDR’s appreciation.
The interplay of these developments suggests that while the USD is under pressure, the IDR faces challenges of its own, driven by internal policy shifts and external economic factors. Moving forward, market participants should closely monitor upcoming data releases and political developments to gauge potential shifts in the USD/IDR exchange rate trajectory.
