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  • USD/IDR recovers ahead of Indonesia data.
  • The latest release of a manufacturing gauge from the US supports immediate USD strength.
  • Trade headlines will keep being the key driver.

Following the pair’s bounce off monthly lows, USD/IDR takes the bids to 14,170 during the Asian session on Tuesday.

The pair has been in a choppy range since the month started as investors seek fresh clues from Indonesia to firm up odds for further rate cut by the Bank Indonesia (BI).

The recent release of the United States’ (US) New York (NY) Empire State Manufacturing Index, 4 versus 1 expected and 2 prior, seems to have triggered the pair’s recovery while domestic political scenario in Indonesia worsens amid attacks on ministers. A Bloomberg story also highlights active plays by the Indonesian elites to strip some of the powers of the President Joko Widodo.

It should also be noted that uncertainty surrounding the US-China trade deal adds to the US Dollar (USD) strength.

Investors will now keep an eye over September month Trade Balance, Exports and Imports numbers to better predict another rate cut from the BI after the latest Retail Sales dimmed prospects of any such move soon. Forecasts suggest an increase to $0.10B from $0.08B in the headline Trade Balance while Exports and Imports are likely to recover to -5.84% and -4.2% compared to -9.99% and -15.6% respective priors.

Other than Indonesian data, the return of the US traders after the extended weekend will also offer an active day ahead.

Technical Analysis

A sustained break below 14,085/80 could recall 14,0000 round-figure while 13,880 will be the key for sellers to watch afterward. Meanwhile, 14,270/80 becomes the tough nut to crack for buyers.