• USD/IDR picks up bids to renew intraday high, rises to the highest levels in eight days.
• Indonesia Imports, Exports improve but Trade Balance deteriorates in May.
• Fed matches market forecasts to halt the rate hike but details appear hawkish.
• US data will be closely observed as FOMC emphasizes incoming data for decision-making.

USD/IDR stays on the front foot for the second consecutive day as it refreshed the weekly top near 14,955 after witnessing mixed Indonesia trade numbers early Thursday. Also exerting downside pressure on the Indonesia Rupiah (IDR) is the US Dollar’s rebound amid hopes of a July Fed rate hike.

Indonesia’s headline Trade Balance drops to $0.44B in May versus $3.02B market forecasts and $3.94B previous readings. The details, however, appear impressive as Imports rose to 14.35%, from -22.32% previous fall and -11.0% prior, whereas the Exports improved to 0.96% versus the previous contraction of 29.4%. It should be noted that the cautious optimism in Asia, amid downbeat China data and hawkish Fed concerns, also propel the USD/IDR prices.

On the other hand, the US Federal Open Market Committee (FOMC) kept the benchmark interest rate unchanged at 5.0-5.25%, matching market expectations of pausing the multi-month-old hawkish cycle after 10 consecutive rate lifts. However, the upbeat FOMC Economic Projections and Federal Reserve (Fed) Chairman Jerome Powell’s speech renewed the hawkish Fed bias and propel the USD/IDR price.

Amid these plays, S&P500 Futures struggle at the yearly top whereas the US Treasury bond yields rebound after witnessing a pullback during the post-Fed move. That said, the US Dollar Index (DXY) prints the first daily gain in three while bouncing off the monthly low to around 103.30 at the latest.

Moving on, US Retail Sales for May and other mid-tier activity data, as well as the weekly Jobless Claims, will be important for the USD/IDR pair traders as the Fed has already highlighted the importance of each incoming data for decision-making.

Technical analysis

A convergence of the two-month-old descending trend line and the 100-DMA, around 15,025 at the latest, challenge USD/IDR bulls even if oscillators are favoring a gradual recovery.