USD/IDR struggles around 15,600 on downbeat Indonesian Retail Sales

• USD/IDR is facing barricades while surpassing the immediate hurdle of 15,600 on weaker Indonesian Retail Sales.
• Indonesian annual Retail Sales have landed at 3.7%, lower than the prior release of 4.6%.
• Going forward, US Factory-gate price index will be of significant importance.

The USD/IDR pair is attempting to climb above the immediate hurdle of 15,600 in the Asian session. The asset is not getting strength amid the release of downbeat Indonesian Retail Sales data. The annual economic data has landed at 3.7%, lower than the prior release of 4.6%. A decline in Retail Sales indicates subdued retail demand by households.

The Inflation rate in the Indonesian economy is declining for the past three months till October. Now, a further decline in Retail Sales will lead to more exhaustion in the inflationary pressures. This is going to delight Bank Indonesia (BI) as their efforts for containing stubborn inflation are gaining momentum.

Meanwhile, the US Dollar Index (DXY) is hovering around day’s low at 104.50 as the risk-appetite theme is gaining significant momentum. S&P500 futures have recorded marginal morning losses and have resumed their recovery after a three-day losing streak. The 10-year US Treasury yields have sensed pressure and have dropped to near 3.46% as the Federal Reserve (Fed) is set to announce a less hawkish monetary policy next week.

On Friday, investors will keep an eye on the United States Producer Price Index (PPI) data. The factory-gate prices will provide fresh cues to the market participants. According to the consensus, the headline PPI in the United States is expected to drop to 7.4% from the prior release of 8.0%. Also, the core PPI is seen lower at 6.0% vs. the former figure of 6.7% on an annual basis. A decline in the factory-gate price index will provide fresh ground for a further decline in inflation.