USD/IDR Close To Multi Week Highs, BI Expected To Remain Unchanged

In line with broader USD trends, USD/IDR is pushing higher in the first part of trade today. We last tracked in the 14950/55 region, -0.30% weaker in IDR terms for the session so far. We are right around May 19 highs and early April highs. Note also the simple 50-day MA is not too far away on the topside, close to 15000. Lows from earlier in the week came in close to 14850.

• The main focus today is the BI decision, with the central bank seen firmly on hold. The outlook, particularly in terms of potential rate cuts, along with financial stability issues (IDR rate etc) are likely to be the main focus points.
• Cross asset wise, the weaker global equity backdrop is likely weighing, while 5yr CDS is no long trending lower. Palm oil prices also remain firmly on the backfoot, back to MYR3539, fresh multi-month lows.
• Portfolio flows have been positive for both equities and bonds this past week, (+114.5mn for equities, +$134.3mn for bonds), but this hasn't aided IDR meaningfully.