USD/IDR Price News: Rupiah pares losses above $14,000 on firmer Indonesia Inflation

• USD/IDR keeps Friday’s rebound despite Indonesia’s firmer CPI, PMI data.
• Fed tapering concerns underpin US dollar ahead of the key Wednesday.
• Fears of China losing economic momentum off the pandemic also challenge IDR.

USD/IDR stays firmer around $14,240, recently easing to $14,235, ahead of Monday’s European session. The Indonesian rupiah (IDR) pair recently ignored firmer Indonesia numbers amid fears concerning China and economic growth at home.

Indonesia’s headline Inflation matches the 1.66% YoY forecast, versus 1.6% prior whereas the figures bear +0.11% market consensus and -0.04% prior with +0.12% figures on MoM. Further, Core Inflation rose past 1.3% previous readouts to 1.33% during October. Additionally, Indonesia HIS Markit PMI for October also rose past 52.2 in September to 52.7.

It’s worth noting that the Bank Indonesia (BI) has recently eased credit card rules. During its latest monetary policy meeting in October, the BI matched wide market expectations of inaction while suggesting a rate hike move in 2022.

Elsewhere, the Fed tapering tantrums underpin the US dollar and the Treasury yields. However, cautious optimism in equities markets and the US stimulus hopes challenge the risk-off mood. Also challenging the USD/IDR bears is the fears that the Asian major China, also Indonesia’s strong trading partner, seems to lose underlying economic recovery momentum from the pandemic as supply crunch and credit crisis challenge the bulls.

Given the firmer US inflation and chatters surrounding Fed tapering, USD/IDR may remain firmer but cautious mood ahead of Wednesday’s Fed verdict may challenge the pair’s advances.

Technical analysis

Although an eight-day-long rising support line, around $14,170, keeps USD/IDR bulls hopeful, 50-DMA and a downward sloping trend line from August 20, around $14,250-55, question the pair’s short-term advances.