The recent performance of the USD to IDR exchange rate suggests a prevailing trend towards a weaker US dollar, influenced by expectations surrounding the Federal Reserve's monetary policy. Analysts have pointed out that the USD is under pressure following the Fed's dovish interest rate cut, with significant bearish sentiment affecting the dollar. Recent data showed a rise in jobless claims, heightening concerns over the strength of the US economy and contributing to reducing projections of future interest rate hikes. Forecasts indicate that the USD could further decline as traders increasingly anticipate aggressive rate cuts in 2026.
In the forex market context, the US Dollar Index (DXY) has seen a pullback, indicating fading demand for the dollar amid improved global risk sentiment and short-term recoveries of other major currencies. Experts note that if equities remain strong, the downside for the USD could continue. Economists highlight that mixed economic indicators show both a cooling growth trajectory and a resilient labor market, presenting a complicated outlook for the dollar.
Conversely, the Indonesian Rupiah's recent developments reflect efforts by Bank Indonesia to stabilize its currency, with Governor Perry Warjiyo announcing plans to target an exchange rate of 16,500 per USD over the coming year. Despite previous convictions, the central bank paused on rate cuts in October to reassess monetary policy impacts, which could either stabilise the rupiah or invite further depreciation.
At present, the USD to IDR is trading at 7-day lows near 16,649, aligning closely with its three-month average and having remained within a narrow band over recent weeks. This relative stability, together with prospects of further USD weakness driven by Fed actions and mixed economic signals, may suggest limited upside potential for the dollar against the rupiah in the near term. Conversely, should US fiscal concerns persist and market sentiment remain risk-on, the IDR might benefit from supportive monetary policies set forth by Bank Indonesia, underpinning its strength against the dollar.
