Rupiah steadies near 15,000 even as Indonesia trade surplus widens

• USD/IDR struggles to defend Friday’s corrective bounce despite downbeat Indonesia trade numbers for June.
• Indonesia Exports slumped 21.18% in June versus 0.96% prior, -18.65% expected.
• Risk aversion, pessimistic headlines surrounding China also put a floor under the Rupiah pair.

USD/IDR remains unimpressive around 15,000 as downbeat Indonesia trade numbers jostle with the mixed sentiment during early Monday.

That said, Indonesia’s Exports slumped 21.18% in June versus 0.96% prior and analysts’ estimations of -18.65%. Further details suggest that Imports drop to -18.35% from 14.35%, versus -7.75% expected whereas the Trade Balance suggests a wider surplus of $3.46B versus $1.35B market forecasts and $0.44B prior.

It should be noted that the downbeat prints of China’s second quarter (Q2) 2023 Gross Domestic Product (GDP) joins geopolitical fears surrounding typhoon Talim in Hong Kong, as well as the International Monetary Fund’s (IMF) fears about inflation, weigh on the sentiment and put a floor under the USD/IDR price.

On the same line could be the comments from New Zealand Prime Minister (NZ) Chris Hipkins and US Treasury Secretary Janet Yellen who flagged the looming geopolitical concerns about China and hence weighed on the sentiment, which in turn defends the USD/IDR buyers.

Elsewhere, consolidation in the US Dollar Index (DXY) price amid the pre-Fed blackout, after posting the biggest weekly loss since November 2022, also challenges the USD/IDR bears despite the quote’s latest failure to extend the previous day’s rebound. It’s worth noting that Friday’s preliminary reading of the University of Michigan’s (UoM) Consumer Confidence Index and consumer inflation expectations push back concerns that the Fed is near to the policy pivot and allow the US Dollar to lick its wounds, as well as lure the USD/IDR buyers.

Looking ahead, the risk catalysts will be important to watch for near-term directions amid a light calendar.

Technical analysis

USD/IDR recovery remains elusive unless printing a daily closing beyond the 10-week-old support-turned-resistance, around 15,030 by the press time.