Indonesian Rupiah declines as US Dollar remains stronger amid hawkish Fed tone
USD/IDR extends its winning streak for the eighth successive day, trading around 17,850 during the Asian hours on Monday. The pair remains stronger as the US Dollar (USD) gains support amid hawkish sentiment surrounding the Federal Reserve (Fed) policy outlook.
The Indonesian Rupiah (IDR) has weakened against the US Dollar (USD) during the Asian trading hours on Monday, maintaining its position as the stronger currency amid hawkish remarks from the US Federal Reserve. The USD/IDR pair is currently trading around 17,850, having consolidated after a recent rebound, with price hovering near the short-term nine-day Exponential Moving Average (EMA) and above the medium-term 50-day EMA.
This technical setup suggests a neutral bias with a slight upward tilt. The RSI for the pair stands at 57.4559, indicating improving bullish momentum without reaching overbought conditions. Market participants are eyeing Bank Indonesia's (BI) upcoming policy decision this week, as the central bank maintains its key interest rates unchanged at 5.75% for the second consecutive month.
The recent hawkishness in the Fed's tone, particularly from Fed Chair Kevin Warsh, has contributed to the USD's strength. Fed Chair Warsh emphasized that the high inflation levels have persisted for too long, signaling the likelihood of more rate hikes in the coming months. The CME FedWatch tool now assigns a 56.5% probability of another US rate hike at the upcoming October meeting, up from 42.5% a week prior.
Traders are positioning themselves ahead of Bank Indonesia's decision, taking into account the mixed signals from the US and Indonesia's central bank.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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