USD/IDR Price News: Rupiah slips from two-month high to 15,000 on downbeat Indonesia inflation

• USD/IDR rebounds from the lowest levels since early February, snaps five-day downtrend.
• Indonesia Inflation eases in March to 4.97% YoY versus 5.17% expected, 5.47% prior.
• US Dollar cheers risk-off mood as the NFP week begins.
• Receding hawkish Fed bets prod pair buyers; focus on US PMIs, jobs report.

USD/IDR prints the first daily gains in six around the 15,000 mark as softer Indonesia inflation numbers join the US Dollar’s rebound during early Monday. Adding strength to the Indonesia Rupiah (IDR) pair is the broad risk-off mood amid inflation woes, as well as anxiety ahead of Friday’s US employment report for May.

Indonesia Inflation drops to 4.97% YoY in March from 5.47% previous readings and 5.17% market forecasts. Further, the Core Inflation also declined during the stated month, to 2.94% versus 3.05% analysts’ estimations and 3.09% prior. It’s worth noting that the Inflation figures on monthly basis rose to 0.18% from 0.16% marked in February but lagged behind 0.29% consensus.

It’s worth noting that the fresh fears of higher inflation, mainly emanating from a surprise Oil output cut from the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, known as OPEC+, weigh on market sentiment and propel the USD/IDR pair. The OPEC+ group announced nearly 1.16 million barrels per day output cut in a surprise move during the week. In doing so, the Oil cartel propels fears of more price pressure and hawkish central bank moves. Following the OPEC+ news, the US National Security Council said. “We don’t think cuts are advisable at this moment given market uncertainty - and we’ve made that clear."

Not only the OPEC+ moves but downbeat China PMI also favor the market’s risk-off mood and allow the US Dollar to the three-week downtrend. That said, China’s Caixin Manufacturing PMI for March drops to 50.0 from 51.6 prior and 51.7 market forecasts.

On the contrary, mixed US data and the Federal Reserve (Fed) policymakers’ inability to convince markets of their hawkish capacity join the easing fears of banking fallouts to exert downside pressure on the USD/IDR pair.

Against this backdrop, the S&P 500 Futures retreat from a 1.5-month high while printing the first daily loss in four, down 0.30% intraday near 4,125 by the press time. On the other hand, the US 10-year and two-year Treasury bond yields print mild gains near 3.52% and 4.11% while paring the latest losses.

Looking forward, US ISM Manufacturing PMI and S&P Global Manufacturing PMI for March can direct intraday moves but major attention should be given to Friday’s US Nonfarm Payrolls (NFP).

Technical analysis

A 13-day-old resistance line, around 15,015 by the press time, restricts the immediate upside of the USD/IDR pair, which in turn suggests another attempt to break an eight-month-old support line, close to 14,950 by the press time.