Indonesian Rupiah remains steady as Bank Indonesia interventions limit USD/IDR upside
USD/IDR holds ground after posting modest losses the previous day, trading around 17,930 during European hours on Wednesday.
The Indonesian Rupiah (IDR) remained relatively stable on Wednesday, with the USD/IDR exchange rate hovering around 17,930. Bank Indonesia (BI) has been intervening in various markets, including spot, domestic non-deliverable forward (DNDF), and offshore non-deliverable forward (NDF) markets, to provide support to the IDR. This intervention comes amid the US Dollar's (USD) struggles, following comments from New York Federal Reserve President John Williams.
Williams indicated that while he believes a rate hike may still be necessary this year, he does not foresee any additional rate increases in 2027. Consequently, markets are now pricing in a 77% chance of the Fed maintaining interest rates unchanged this month, and an 88% probability of a rate hike in December. The focus is now shifting to the US September CPI inflation data, which will be released later in the North American session.
The forecast suggests a year-over-year increase of 3.6% in September, up from 3.4% in August. Core CPI, which excludes volatile items, is expected to rise to 2.5% year-over-year from 2.4% in the previous month. Fed's Collins' speech received a score of 7.1/10 on the FXS Speechtracker, slightly above the historical average of 6.7/10.
This suggests a slightly stronger hawkish tone compared to the historical average, with a focus on the "elevated risk of high inflation," expectations of inflation staying above 2% due to high energy prices, and support for the September rate hike. Despite the hawkish stance, the overall Fed tone remains firm and data-dependent.
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