January 12, 2023 03:47 GMT
USD/IDR Sub 100-Day EMA
IDR has continued to play catch up in the first part of today's session. USD/IDR spot is down a further 0.70%, comfortably outperforming the rest of the USD/Asia bloc. This puts us back at 15375, which is right on early Dec lows. It also puts us below the 100-day EMA (15413) for the first time since August last year.
- Early October highs from last year, jsut above 15300, may be the next downside target, while the 200-day EMA sits at 15150. A lot may depend on how the US CPI print unfolds later today in terms of further gains.
- Reports from yesterday that the authorities will require more export earnings to be kept onshore continues to aid the rupiah. The scheme will be expanded from the mining/agricultural sector to include manufacturing. The term may also be expanded from 3 months to up to a year.
- Given the country is still running trade surpluses this should benefit the local currency.
- In the cross-asset space, the decline in US real yields will also be helping the IDR.
- The terms of trade proxy is moving in the opposite direction, as palm oil prices remain near recent lows. CDS levels are still trending lower though.