- USD/IDR bounces off two-month low flashed on Wednesday.
- BI’s Warjiyo expects firmer bond yields but shrugs off rate hike calls.
- Asia-Pacific markets remain quiet, mildly amid virus-linked risk-on mood.
USD/IDR seesaws around $14,210, following an uptick to $14,250, during early Friday morning. In doing so, the Indonesian rupiah (IDR) pair prints daily gains for the first time in four days while bouncing off the monthly low marked two days before, also the lowest levels since October.
The corrective pullback move could be linked to the Bank Indonesia (BI) Governor Perry Warjiyo’s comments, shared by Reuters at the latest.
“Indonesian bonds will have to rise by 50 basis points (bps) next year to match an expected increase of 50 to 75 bps in U.S. Treasury yields as the United States tightens monetary policy,” said BI’s Warjiyo.
The Indonesia central bank boss also predicted the increase in inflation would start in the third quarter of 2022, per the news. However, the BI leader reiterated the bank's pledge to keep Indonesian interest rates low until inflation started heating up.
On a different page, the Christmas Eve holiday in multiple Western markets and a light calendar restrict the USD/IDR moves. However, upbeat US Treasury yields at the last, backed by the firmer US Core PCE Price Index, not to forget Durable Goods Orders and Michigan Consumer Sentiment Index, favored the pair buyers. Alternatively, positive updates over the covid strain’s cure and studies taming fears of hospitalizations keep the market’s sentiment mildly positive and guard the USD/IDR pair’s immediate upside.
Technical analysis
Unless providing a daily close beyond the $14,283-87 region comprising the 100-DMA and 50-DMA, USD/IDR bears remain hopeful. Alternatively, May’s low around $14,090 lures the pair sellers for now.