Growing Firmer On Vaccine News

Spot USD/IDR has extended losses today, building on yesterday's decline seen after the pair rejected the 23.6% recovery of the Sep 11 - Nov 10 slide last Friday. The latest leg lower has been driven by positive risk appetite at the start to the week, with main sources of optimism provided by the finalisation of the RCEP trade pact between ASEAN countries, China, Japan, South Korea, Australia and New Zealand, as well as the news that Moderna's Covid-19 vaccine showed 94.5% effectiveness in a late-stage clinical trial and proved to be stable for a month in refrigerator temperature. The spot last operates -65 pips at IDR14,045.

• A breach of Nov 10 low/round figure of IDR14,004/14,000 would confirm the resumption of the downtrend, opening up key support from Jun 8 low of IDR13,873. On the flip side, a rebound above Nov 13 high/aforementioned retracement level at IDR14,222/14,227 would encourage bulls to set their sights on the next (38.2%) Fibo level at IDR14,365.
• Bank Indonesia is set to deliver its monetary policy decision this Thursday. 14 out of 26 economists surveyed by BBG expect policymakers to leave the main policy rate unchanged at 4.00%, with further 11 analysts looking for a 25bp cut and 1 calling for a 50bp cut.
• Later in the week, Indonesia will publish BoP current account balance for Q3 on Friday.