USD/IDR: Strongly bid above 15,200 as Indonesia braces for coronavirus outbreak
- USD/IDR stays upbeat around 29-month high.
- Indonesian government warns of escalating coronavirus cases, considers measures like cutting fuel prices.
- IDX drops for the third day in a raw, revisits early-2015 lows.
With the Indonesian government sparking fears of escalating coronavirus (COVID-19) cases, USD/IDR near the multi-month top while taking the bids to 15,230, up 1.25%, amid initial Wednesday.
Reuters relied on the health ministry official Achmad Yurianto’s comments to convey that Indonesia is bracing for a significant increase in coronavirus cases as it widens efforts to locate and test victims. The country’s Transport Minister Budi Karya Sumadi was termed as infected during the late last week whereas results of the Prime Minister Joko Vidodo and family are still unannounced.
The Asian nation was recently under fire with allegations of handling the virus outbreak as lightly.
This might have pushed the nation to announce fresh entry barriers from Europe and Iran while also indicating measures like relief fuel prices.
It should also be noted that the country registered its largest trade surplus since 2011 the previous day.
Elsewhere, the US government undertook various measures, together with the Fed, to ward off the negative implications of the deadly virus, which in turn offered broad strength to the greenback on Tuesday.
The risk-tone remains on the recovery mode with the US 10-year treasury yields back above 1.00% while stocks in China and Japan marking smaller gains. However, the Indonesian benchmark, IDX, drops for the third day in a row to the lowest since early-2015.
Looking forward, investors will keep eyes on the virus headlines as well as the government’s action plan to confront the disease for near-term direction.
Technical Analysis
Even if overbought RSI favors a pullback to 15,000 round-figure can’t be ruled out, the pair remains strong unless breaking below April 2019 high surrounding 14,750.