USD/IDR Price News: Rupiah whipsaws above 15,200 on downbeat Indonesia Inflation, China stimulus, US NFP eyed

• USD/IDR struggles to defend three-day winning streak amid mixed catalysts, pre-NFP anxiety.
• Indonesia Inflation, Core Inflation decline in August and weigh on Rupiah but China stimulus measures prod IDR bears.
• US Dollar retreats amid mixed Fed concerns ahead of monthly US employment report.

USD/IDR edges higher past 15,200, mildly bid near 15,230 by the press time, during a volatile Friday morning for the Asia-Pacific currencies. The pair’s latest moves aptly justify the downbeat Indonesia inflation, as well as the China-inspired risk-on mood, ahead of the top-tier US jobs report.

Indonesia's Inflation gauge drops to -0.02% MoM from 0.21% prior, versus 0.10% expected whereas the yearly figures came in below forecasts but manage to post better figures with 3.27% YoY marks. Further, the Core Inflation also declines to 2.18% YoY compared to 2.43% prior and 2.30% expected.

While Indonesia data allows the USD/IDR pair to remain firmer for the third consecutive day, the upbeat mood in the Asia-Pacific zone, due to China stimulus measures and upbeat data from Beijing, cap the pair’s upside moves of late.

That said, China’s Caixin Manufacturing PMI for August rose to 51.0 versus 49.3 market forecasts and 49.2 previous readings. Further, the People's Bank of China (PBoC) announced early Friday that it will lower the foreign exchange reserve requirement ratio to 4%, from 6.0%, effective from September 15. On the same line, a slew of China banks cut interest rates on Yuan deposits while citing the readiness to ease the pressure from lower mortgage rates, per Reuters. Among them, ICBC, China Industrial Bank, Agricultural Bank of China and Bank of China (BoC) gained major attention.

It’s worth observing that the US Dollar Index (DXY) fades the previous day’s corrective bounce off the 200-DMA as market players appear divided about the US Federal Reserve’s (Fed) next step considering the previous day’s mixed data versus earlier downbeat signals.

Talking about the US data, the Fed’s preferred inflation gauge, namely the US Core Personal Consumption Expenditure (PCE) Price Index for August, matched market forecasts of 4.2% YoY and 0.2% MoM versus 4.1% and 0.2% respectively priors. Further, the Initial Jobless Claims dropped to 228K from 232K prior (revised) versus 235K market forecasts while the Chicago Purchasing Managers’ Index rose to 48.7 for August compared to 44.1 expected and 42.8 previous readings. Additionally, Personal Spending rose past the 0.6% expected and previous readings to 0.8% for July whereas Personal Income eased to 0.2% for the said month, from the 0.3% market forecast and prior.

Looking forward, the US employment report for August will be crucial for the USD/IDR pair traders to watch for clear directions, especially after Atlanta Fed President Raphael Bostic defended the US central bank’s view of keeping rates high.

Forecasts suggest that the headline US Nonfarm Payrolls (NFP) could ease to 170K versus the previously upbeat outcomes of the JOLTS Job Openings, ADP Employment Change and higher prints of the US Continuing Jobless Claims. Additionally, the three-month average of the US NFP halves to 218K versus a year earlier. As a result, the overall scenario of the US job numbers appears downbeat and can only defend the USD/IDR by posting an extremely strong outcome.

Technical analysis

Although the 200-DMA puts a floor under the USD/IDR price near 15,150, the pair buyers should remain cautious unless they witness a daily closing beyond the fortnight-old resistance line, close to 15,260 by the press time.