USD/IDR stays positive around 13,700 ahead of Indonesia GDP

• USD/IDR keeps bearing the burden of China’s coronavirus outbreak.
• The pair declined the previous day amid risk reset in Asia.
• BI stays ready to interfere whenever needed, growth figures might gain for now but could come under pressure soon.

USD/IDR ignores the previous day’s losses while being mildly positive to +0.10%, 13,705, during Wednesday’s Asian session. The pair dropped due to the risk recovery in Asia the previous day. However, on-going fears of coronavirus and nearness to the key data keep Indonesian Rupiah (IDR) under pressure.

As per the Reuters Poll, the Indonesian economy will expand 5.04% from a year earlier, a touch quicker than the pace in the previous three months of 5.02%, during the last quarter (Q4) of 2019. However, some among the 21 analysts surveyed noted that the coronavirus epidemic in China could hurt the global economy, including Indonesia.

While Indonesia has already put a temporary halt on food/goods import from China, there have been no cases of coronavirus infected people from the Asian nation so far.

Also read: Coronavirus update: Hubei reports 65 new deaths, Ecuador announces its first case

Even so, policymakers at Indonesia stay ready to interfere in markets if needed as per the Bank Indonesia (BI) official’s latest comment on Tuesday. Nanang Hendarsah, Head of monetary management at BI said that the central bank intervened in spot FX, domestic NDF and bond markets to stem the rupiah’s decline.

Markets anticipate a 5.04% YoY figure versus 5.02% prior but the QoQ figures are likely to soften to -1.67% versus 3.06% earlier.

Technical Analysis

Unless breaking a descending trend line ranging from November 2019, at 13,885 now, prices are less likely to avoid visiting sub-13,600 area.