USD/IDR Outlook:
The USD/IDR is currently slightly positive and likely to move sideways as it trades near recent highs and is just above its 90-day average. The upward momentum is driven primarily by safe-haven demand due to geopolitical tensions.
Key drivers:
- Rate gap: The Federal Reserve's more hawkish stance contributes to USD strength compared to the Bank of Indonesia’s recent market interventions.
- Risk/commodities: Rising oil prices amid geopolitical risks increase global demand for USD, as oil is priced in dollars.
- One macro factor: Indonesia’s fresh fiscal stimulus package aims to support economic growth, but concerns about the rupiah's stability persist.
Range:
The USD/IDR is likely to hold within its recent range but might drift closer to the upper limit if safe-haven demand persists.
What could change it:
- Upside risk: Continued escalation in geopolitical tensions could drive further investment into USD.
- Downside risk: Strong economic indicators from Indonesia could bolster the rupiah and reduce USD/IDR rates.
