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Rupiah slips as USD firms on hawkish Fed odds
USD/IDR traded near 17,770 during Asian hours, while Indonesia’s annual inflation accelerated to 3.19% in August and core inflation rose to 2.92%.
FXStreet reports USD/IDR edged higher during Asian hours on Tuesday, holding around 17,770 despite minor losses earlier, as the US dollar rebounded on hawkish expectations around the Federal Reserve.
The outlet says traders increased bets on a September rate hike after Fed officials signaled more progress is needed for inflation to return to the 2% target, with the CME FedWatch Tool pricing in a greater than 66% probability of a hike in September, up from about 41% a week earlier.
FXStreet notes investors are watching a busy US data calendar for additional policy cues, including manufacturing and services figures ahead of Friday’s August Nonfarm Payrolls report.
On the domestic side, the outlet links continued pressure on the Indonesian rupiah to August inflation, with annual inflation rising to 3.19% from 2.88% in July, core inflation reaching 2.92%, and monthly consumer prices increasing 0.21%.