USD/IDR Pressing Towards YTD Highs, Little Relief From Lower Yield Backdrop

USD/IDR is up close to 0.35% in the first part of trade today, last at 16275/80. This is very close to earlier YTD highs of 16288, recorded back in mid April. The 20-day EMA is tracking higher and last near 16114.

• The rupiah has underperformed the softer US yield backdrop in the past week or so. The US 10yr real yield is off more than 20bps from recent highs but this is yet to aid the IDR.
• To be sure, other cross asset signals are working the other way. Local equities are struggling to hold above the 7000 level and remain under the simple 200-day MA. Offshore investors have sold just over $2bn of local equities in Q2 to date, although outflows in June so far have been light.
• Weaker energy prices are another potential headwind, given Indonesia's export basket has some exposure in this space. Still the Citi terms of trade proxy is only down a touch. 5yr CDS is behaving relatively well.
• BI stated late yesterday that the FX should average 15700-16100 for 2024. The current YTD average is 15831, so slightly sub the 15900 midpoint expected by the central bank. Next year BI sees an average of 15300-15700.
• The data calendar is quiet for the rest of the week, with just May FX reserves out on Friday.