HALISTER1: Rupiah May Find Reprieve If BI Maintains Policy Rate: Analysis

Rupiah May Find Reprieve If BI Maintains Policy Rate: Analysis

(Bloomberg) -- USD/IDR may remain in 13,200-13,500 range near-term if Bank Indonesia leaves benchmark rate unchanged this week to support rupiah against the strengthening dollar, Bloomberg strategist David Finnerty writes.
  • Rupiah has come under pressure against the USD this past week as speculation over Trump’s stimulative economic policies sent U.S. yields soaring, and boosting the greenback
    • Rupiah’s losses between Nov. 9-11 following Trump’s election victory, coincided with global funds net selling of $209.1m in Indonesian equities and $112.1m in local bonds
  • U.S. yields eased today for the first time since the U.S. vote; 10-yr yield is -5bps to 2.2153%
    • U.S. 10-yr yield may face initial resistance between 2.32%-2.37% level, the highs reached between November and December 2015, followed by several other resistances up to 2.50%
  • Bank Indonesia will leave 7-day reverse repo rate unchanged at 4.75%, according to 12 of 14 economists in Bloomberg survey; 2 forecast a rate cut of 25bps; decision due Nov. 17
  • NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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