IDR: USD/IDR Back Close To 100-day EMA Support, Indonesian Assets Rallying
May-20 03:10
The rupiah is trading on a firmer footing in the first part of Tuesday trade, with USD/IDR testing back under 16400. We are only up 0.20% in IDR terms, but the currency is outperforming most other parts of USD/Asia and higher beta FX in the G10 space, like the AUD. We are back close to the 100-day EMA support zone, which has marked lows in the pair so far in May, see the chart below.
- Better Indonesian sentiment is reflected in local stocks, with the JCI up more than 20% from early April lows. Offshore investors have added modestly to local equities so far this month (+$138.2mn).
- Bond inflows have been stronger, in May to date, with President Prabowo pledging (earlier this month) to maintain fiscal discipline a potential positive on this front. 5yr CDS is has tracked lower, last around 83.50. April highs were at 138.37.
- IDR has caught up with the Asian FX rally to some degree, up +1.2% for May, the third best performer in the region after TWD and KRW. Still, IDR remains 1.8% weaker since the start of the year.
- Tomorrow, the BI is expected to cut rates, per the sell-side consensus, although some forecasters see risks of a steady outcome.
Fig 1: USD/IDR Back Close To 100-day EMA Support
Source: MNI - Market News/Bloomberg
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