USD/IDR Rebounds Amid Onshore Protests, Oversold Conditions Correcting

USD/IDR is pushing higher in the first part of Thursday trade. The pair was last near 15565/70, a little over 0.50% weaker in IDR terms for the session. The 1 month NDF has followed a similar trajectory (last near 15580). Onshore protests over proposed electoral changes, which are viewed as being favorable to current incumbents in terms of out going President Jokowi and incoming President Prabowo Subianto have been evident today (see this BBG link).

• Risk gauges like the 5yr CDS sit up a touch from, but remain very close to recent lows. Local equities around off by around 0.50% at this stage, but this follows a very strong run higher in recent weeks.
• Potentially contributing to the move higher in USD/IDR spot is a correction from oversold conditions. The RSI (14) is back close to 30.
• Still, key EMAs are clustered back above the 15800 level, so well above current spot levels. Recent lows rest near 15424.
• Local protests will be a watch point for investors. Headlines have just crossed that the plenary to pass the election law change has been delayed.
• On the data front, the Q2 current account deficit was slightly wider than projected at just over $3bn (-$2.45bn was projected). We are still comfortably above 2018/19 levels for the deficit.
• BI is still expected to start its easing cycle in coming months, although uncertainty remains over the timing.