China’s July manufacturing PMI fell to 49.2, missing estimates and pressuring the Indonesian Rupiah amid Fed policy uncertainty.
USD/IDR climbed to 18,120 in Asian trading Friday, reversing two days of losses as China’s weaker-than-expected PMI data dampened demand for the Indonesian Rupiah. Indonesia’s currency faced pressure after China’s NBS Manufacturing PMI contracted to 49.2 in July, below the 50.0 forecast and down from 50.3 in June. The non-manufacturing PMI also slipped to 49.0, missing expectations of 50.0.
The decline in China’s economic activity, Indonesia’s largest trading partner, heightened concerns over regional growth. Meanwhile, the US Dollar found support as traders weighed a hawkish Federal Reserve outlook, with the FOMC’s 9-3 vote split signaling internal debate over future rate cuts. Analysts noted the Fed’s cautious stance despite easing global risk sentiment.
Market reaction remained cautious, with traders balancing Fed policy uncertainty against cooling Middle East tensions, which could reduce safe-haven demand for the USD.