Indonesia’s rupiah strengthens after foreign direct investment jumps 27.4% year-over-year in Q2, pressuring the USD/IDR pair.
The USD/IDR pair extended its decline to a fourth day, trading near 17,990 in Asian hours Friday as the Indonesian rupiah gained ground. The currency’s strength followed a 27.4% year-over-year increase in Q2 foreign direct investment, bolstering investor confidence.
June headline inflation edged toward the upper limit of Bank Indonesia’s target range, prompting government measures to stabilize food prices amid El Niño-related supply risks. Meanwhile, geopolitical tensions in the Middle East, including threats to Red Sea oil routes, provided some support to the US dollar.
Softer-than-expected US inflation data earlier this week led traders to reduce bets on near-term Federal Reserve rate hikes, adding downward pressure on the greenback.