Despite negative statistics, the USD/IDR continues on the back foot for the second day in a row.
Inflation took a step back in June, according to the IHS Markit PMI, while Core Inflation improved.
Indonesia has declared an 18-day state of emergency, which will begin on Friday, as covid numbers reach new highs.
China’s Xi boosts to USD strength ahead of the ISM Manufacturing PMI, according to Fedspeak.
The USD/IDR is under pressure, falling 0.15 percent intraday to $14,522 ahead of the European day on Thursday. In doing so, despite good Core inflation data, the Indonesian rupiah (IDR) pair pays a little attention to the dismal inflation and activity indicators, as well as the coronavirus (COVID-19)-led pessimism at home.
Indonesia’s inflation fell below 1.41 percent YoY to 1.33 percent, while monthly readings fell above the projected -0.09 percent to -0.16 percent. Earlier in the day, the IHS Markit PMI fell from 55.3 to 53.5 in the specified time frame. It’s worth noting that the Core Inflation figures rose beyond the market consensus of 1.43 percent and 1.37 percent, compared to 1.49 percent in June.
On the other hand, Asia’s fourth-largest country in terms of population keeps resetting all-time highs in covid numbers, forcing policymakers to declare an emergency from July 02 to July 20. According to Reuters, the country saw 21,807 new cases on Wednesday.
Not just in Indonesia, but also in Australia, Malaysia, Thailand, and the United Kingdom, the virus is wreaking havoc. According to the New York Post, the US Centers for Disease Control and Prevention (CDC) remained hopeful about their vaccine and rejected the necessity for masks.
Although the pair had risen to its highest level since April the day before, the cautious mood ahead of today’s US ISM Manufacturing PMI appears to be testing the greenback purchasers of late. The positive prints of S&P 500 Futures and the modestly bid IDX Composite, Indonesia’s equities index, could also lead to the USD/IDR weakness.
Moving forward, USD/IDR traders should keep a watch on the latest headlines, as well as Fedspeak, as well as the US ISM Manufacturing PMI and weekly Jobless Claims, for new direction. Although better economic data should keep markets upbeat and weigh on pair prices, bulls aren’t out of the woods yet ahead of Friday’s US nonfarm payrolls report.
USD/IDR is headed for a three-week-old support level near $14,486 thanks to a downward sloping trend line dating back to October 2020./nRead More