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USD/IDR rises for a second day as IDR weakens and risk aversion grows
USD/IDR is trading near 17,920, with traders looking to Bank Indonesia’s Aug. 19 meeting for the next catalyst after muted Indonesian retail sales and consumer confidence in July.
The Indonesian rupiah is under pressure as USD/IDR extended gains for a second straight day, moving around 17,920 during Wednesday’s European session, FXStreet reported.
The pair’s rise is linked to weak domestic economic fundamentals and subdued sentiment in Indonesia, with July retail sales and consumer confidence staying muted and weighing on support for the IDR.
Attention is shifting to Bank Indonesia’s next monetary policy meeting on Aug. 19, the first since former Governor Perry Warjiyo stepped down last month, when acting Governor Destry Damayanti has been nominated as the sole candidate for the leadership role.
FXStreet also cited heightened safe-haven demand for the US dollar tied to Middle East geopolitical uncertainty and said an upcoming US inflation report could influence expectations for the Federal Reserve’s next move, with the odds of a 25 basis point hike in September edging to nearly 50% on the CME FedWatch Tool.