• USD/IDR remains firmer around the highest levels since April 2020, marked the previous day.
• Indonesia Inflation, S&P Global PMI for October ease below market forecasts.
• US dollar’s struggle to extend previous run-up amid mixed feeling over Fed limits immediate upside.

USD/IDR grinds higher around $15,650 after Indonesia inflation and activity numbers failed to lure bears during early Tuesday. In doing so, the Indonesia rupiah (IDR) struggles to portray the US dollar’s latest pullback while taking rounds to the highest levels since April 2020.

Indonesia’s headline inflation eased to 5.77% YoY versus 5.99% market forecasts and 5.95 prior. That said, the nation’s S&P Global PMI for the said month also eased to 51.8 from 53.47 in September.

Following the data release, Reuters stated that Indonesia's inflation rate eased in October but remained above the central bank's target range for five straight months, statistics bureau data showed on Tuesday, against market expectations for a slight acceleration.

On the other hand, the recently softer US data pushed the US dollar traders to weigh on Fed’s announcements, given the already priced-in 75 bps rate hike. Also keeping the quote’s upside intact could halt the US Treasury yields’ run-up and mixed comments from US President Joe Biden and Russian leader Vladimir Putin.

On Monday, the US Chicago Purchasing Managers’ Index and Dallas Fed Manufacturing Business Index for October came in at 45.2 and -19.4 versus 47.0 and -15.0 expected respectively. “US President Joe Biden on Monday called on oil and gas companies to use their record profits to lower costs for Americans and increase production, or pay a higher tax rate, as he battles high pump prices with elections coming in a week,” said Reuters. On the other hand, Russia’s Putin said he can set up a gas hub in Turkey ‘quite quickly’ and was sure gas contracts will be signed. The Russian leader also added that there will be many in Europe who want to do so.

Elsewhere, the risk-on mood in the Asia-Pacific region failed to impress the USD/IDR bears.

The reason could be linked to the previous day’s comments from Bank Indonesia (BI) Deputy Governor Dody Budi Waluyo who warned that the central bank sees persistent risks from high global energy and food prices, particularly with European countries set for higher demand during winter reported Reuters.

Looking forward, the US ISM Manufacturing PMI, likely to ease to 50.0 versus 50.9 prior, will direct immediate market moves. Following that, the US S&P Global Manufacturing PMI for the stated month, expected to confirm the initial forecast of 49.9 figure, will join the JOLTS Jobs Openings for September, forecast 10M versus 10.053M prior, to also entertain USD/IDR traders.

Technical analysis

Although a weekly resistance line restricts immediate USD/IDR upside to around $15,685, a two-month-old bullish channel favors the pair buyers unless the quote stays beyond $15,500.