USD/IDR clings to 14,000 amid broad USD weakness, all eyes on Indonesia trade data

• Receding political pessimism at Indonesia, President’s upbeat pledges drag the USD/IDR pair downward amid overall greenback declines.
• Monthly trade balance data from Indonesia can offer immediate direction.

With the receding political pessimism at Indonesia and the President Joko Widodo’s promises to increase infrastructure investments during his second term, the USD/IDR pair remains on a back foot around 14,000 mark during early Monday morning in Asia.

As per Australia’s SBS news, the Indonesian President Joko Widodo and his rival Prabowo Subianto searched for post-election peace when they shook hands on Saturday. The opposition party registered peaceful protests against the Presidential election results in May. However, the constitutional court ruled out any such behavior by the ruling party leader and President.

Adding to the optimism could be President Widodo’s pledge, as per the Reuters’ news report, for faster infrastructure development to create more investment opportunities, increase job creation and rise above the 5% barrier to growth.

Elsewhere, doubts surrounding the US Federal Reserve’s favor for easy monetary policy and absence of trade deal between the US and China continue to weigh on the US Dollar (USD) off-late.

Moving on, June month trade data from Indonesia could offer fresh direction to the pair. While the headline Trade Balance is expected to decline to $-1.3 billion from $0.21 billion, exports could dig further down to -14.70% versus -8.99% and the imports might improve to -5.00% from -17.71% earlier.

Technical Analysis

A sustained break below April month low of 13,974 can fetch the quote to February month bottom around 13,860. However, an upside clearance of June 21 low surrounding 14,080 can trigger the pair’s rise towards 21-day exponential moving average (21-D EMA) level of 14,135.