• USD/IDR rebounds from five-week low, snaps three-day downtrend.
• Indonesia Inflation rose the most since late 2015 in July, Core Inflation also increased in the said month.
• US dollar pares recent losses amid sluggish markets, cautious sentiment ahead of key data/events.

USD/IDR marches towards $14,900 amid the initial hours of Monday’s Asian session. In doing so, the Indonesia rupiah (IDR) pair marks the first daily gains in four while bouncing off a five-week low printed the previous day.

In doing so, the USD/IDR pair pays little heed to Indonesia’s headlines Inflation data for July. As per the latest data, Indonesia Consumer Price Index (CPI) for July, the headline inflation gauge rallied 4.94% YoY versus 4.82% expected. Further details suggest that the Core CPI rose 2.86% versus 2.85% market consensus.

It’s worth noting that Indonesia’s Inflation data marked the biggest jump in price pressure in seven years.

The same should have ideally weighed on the USD/IDR prices amid hopes of further rate hikes from the Indonesia central bank, namely the Bank Indonesia (BI). However, the US dollar’s rebound and a light calendar appeared to have favored the pair’s recovery of late.

That said, Indonesia’s 10-year bond yields dropped to the lowest levels since June 08, around 7.11% by the press time, which in turn favored USD/IDR prices of late.

Moving on, ISM Manufacturing PMI for July, expected at 52 versus 53 prior, could direct immediate USD/IDR moves ahead of Friday’s US jobs report.

Technical analysis

USD/IDR recovers from the 50-DMA support surrounding $14,800 but the recovery moves need validation from mid-July’s swing low surrounding $14,940.