USD/IDR Price News: Indonesian rupiah stays on the front-foot near two-week high
- USD/IDR fades pullback moves from 14,446, nears the lowest since July 15.
- Indonesia's government will propose expanding its 2021 fiscal deficit assumption to 5.2% of GDP versus 4.17%-4.7% previous forecast.
- Jakarta posts daily record in new cases, total figures cross 100,000 in Indonesia.
USD/IDR eases from 14,583 to 14,547 during the pre-European session on Tuesday. Although the US dollar marks broad recovery moves, Indonesian rupiah (IDR) remains beneficiary of hopes concerning further stimulus from the Asian nation’s government. In doing so, the pair ignores the surge in the country’s coronavirus (COVID-19) numbers as the comparative toll in the US is higher.
Early on Tuesday, Reuters quoted Indonesia’s Finance Minister Sri Mulyani Indrawati said, “Indonesia's government will propose expanding its 2021 fiscal deficit assumption to 5.2% of gross domestic product (GDP).” Speaking after a cabinet meeting, she said President Joko Widodo wanted more fiscal room next year to weather uncertainty over the end of coronavirus pandemic and the availability of a vaccine. Indrawati has previously said the 2021 fiscal deficit was expected to be between 4.17%-4.7% of GDP.
The Asian nation’s pandemic numbers cross the 100,000 threshold on Monday. “Indonesia's official tally of COVID-19 cases has reached 100,303 after the government recorded 1,525 new infections on Monday, with Jakarta reporting its highest one-day spike since the first confirmed cases were detected in the city in March,” confirmed The Jakarta Post. To combat the deadly disease, the government recently escalated measures to tame the office infection clusters after the capital city marked a notable increase in the new cases.
On the positive side, VOA conveys that Indonesia is set to move into the front ranks of countries pursuing a vaccine against the coronavirus next week with the launch of phase 3 clinical trials in Bandung, West Java.
Talking about the US, policymakers are inching closer to passing the much-awaited fiscal relief bill. While the Republicans have already said to propose $1.0 trillion, the Democrats might want to push for their $3.5 trillion plan. Furthering the odds of stimulus is growing chatter about the Federal Reserve Chairman Jerome Powell’s anticipated dovish statement following Wednesday’s monetary policy meeting.
Against this backdrop, US 10-year Treasury yields gain 1.6 basis points (bps) to 0.625% while Indonesia’s IDX Composite drops 0.15% to 5,108 by the press time.
While Jakarta’s push for economic overhaul amid virus woes seems to favor the currency, the recent USD recovery is likely to prevail longer if American Senators join to combat the pandemic.
Technical analysis
Not only a 200-day SMA level of 14,464 but an upward sloping trend line from June 06, at 14,497 now, also question the pair’s further downside. Alternatively, 100-day SMA near 15,000 becomes a tough nut to crack for the bulls.