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  • USD/IDR fails to respect the greenback’s recovery moves following the Fed-led drop.
  • Bank Indonesia’s (BI) Governor Perry Warijyo struck upbeat comments the previous day.
  • Indonesia reported biggest daily jump in coronavirus cases on Wednesday.
  • US discuss plans to relocate American companies from China to Indonesia.

USD/IDR becomes the odd one out amid the broad US dollar rebound during the early Thursday. The quote drops 0.26% on a day to revisit 13,988 level ahead of the European session. In doing so, it reverses the previous day’s rise while also stepping back from Friday’s top.

The pair seems lagging in response to the BI Governor Warjiyo’s comments that the rupiah has the potential to strengthen as it remains undervalued. Another positive could be traced from The Eurasian News which cited ongoing negotiations between the US and Indonesia to avail 4,000 hectares of land in Central Java to accommodate US companies planning to relocate from China.

On the contrary, the US dollar index (DXY), a gauge of the greenback versus major currencies, bounced off three-month low to 96.40, up 0.35% on a day, by the press time. The reason could be traced from the market’s risk-off mood following the US Federal Reserve Chairman’s signal for the further weakness of the job market.

Also against the move is the surging virus numbers in the Asian nation. As per Reuters, Indonesia reported on Wednesday its biggest daily increase in coronavirus cases for a second successive day, with 1,241 new infections, taking its total to 34,316.

Amid all these catalysts, the US 10-year Treasury yields remain downbeat near 10-day low whereas stocks in Asia also flash losses as we write. It’s worth mentioning that Indonesia’s IDX Composite print over 0.50% loss to 4,895 by the time of writing.

Moving ahead, the US second-tier data like Jobless Claims and Michigan Consumer Sentiment might offer intermediate moves ahead of Friday’s Indonesian Retail Sales.

Technical analysis

Unless breaking a two-month-old falling trend line, currently around 14,290, the pair can stay on the bears’ radar.


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