USD/IDR Price News: Rupiah stays firmer around 11-month high near 14,700 on mixed Indonesia GDP

• USD/IDR takes offers to refresh intraday low, fades bounce off the lowest levels since June 2022.
• Indonesia GDP beats expectations and surpasses previous readouts in Q1.
• Post-Fed optimism in Asia ignores softer China PMIs to also weigh on USD/IDR prices.

USD/IDR justifies upbeat prints of Indonesia's growth numbers by retreating to 14,680 during early Friday. In doing so, the Indonesia Rupiah (IDR) pair also benefits from the broad US Dollar weakness and cautious optimism in the Asia-Pacific region.

Indonesia’s first quarter (Q1) 2023 Gross Domestic Product (GDP) rises to 5.03% YoY versus 4.95% expected and 5.01% prior. That said, the quarterly figures also improved to -0.92% QoQ from -1.0% anticipated and 0.36% prior.

“Indonesia's post-pandemic recovery has been helped by a commodities-led export boom, though analysts expect a slowdown in growth as commodity prices ease and monetary policy tightening around the world hits global demand,” said Reuters following the data release.

On the other hand, the US Dollar Index (DXY) retreats to 101.30, fading the previous day’s corrective bounce off a one-week low, as markets remain convinced of the Federal Reserve’s (Fed) policy pivot after recently mixed US data and Fed meeting.

Talking about the US data, preliminary readings of the US Nonfarm Productivity and Unit Labor Cost for the first quarter (Q1) of 2023 came in mixed. That said, Nonfarm Productivity dropped to -2.7% in Q1 from 1.6% prior and -1.8% market forecasts whereas the Unit Labor Cost jumped to 6.3% versus 5.5% expected and 3.3% prior. Further, the US Goods and Services Trade Balance improved to $-64.2B from $-70.6B prior and $-63.3B market forecast. Further, Initial Jobless Claims edge higher to 242K for the week ended on April 28 versus 240K expected and 229K in previous readings.

Elsewhere, banking fears US banking sector woes join looming default fears to challenge the market sentiment. However, recent actions from the US policymakers and comments suggesting no immediate fears of the banking crisis seem to exert downside pressure on the US Dollar.

Alternatively, downbeat China data should have put a floor under the USD/IDR prices but did not amid cautious optimism. That said, China’s Caixin Services PMI for April eases to 56.4 versus 56.5 expected and 57.8 prior. Earlier in the week, China’s Caixin Manufacturing PMI for April dropped to 49.5 versus 50.3 expected and 50.0 prior while the official NBS Manufacturing PMI offered a negative surprise before the Chinese markets went on a long holiday until Thursday.

Against this backdrop, S&P 500 Futures print mild gains even if Wall Street benchmarks closed in the red. Further, the US Treasury bond yields ended Thursday’s North American session on the downside but an absence of Japanese traders limit bond market moves in Asia.

Moving on, USD/IDR may witness lackluster moves ahead of the key US employment data for April. However, the pair’s odds of rebound are high as forecasts suggest downbeat prints of the headline US Nonfarm Payrolls (NFP), expected 179K versus 236K prior.

Technical analysis

A downward-sloping support line from late January, near 14,590 by the press time, can keep offering a corrective bounce to the USD/IDR pair amid nearly oversold RSI conditions.