- USD/IDR nears four-day low, awaits further clues to extend the latest declines.
- Indonesian GDP dropped to four-year low the previous day, coronavirus fears prevail.
- Upbeat data from the major economies, rising equities keep the risk-tone lighter.
- Friday’s US jobs data will be the key to watch.
USD/IDR remains under pressure while taking rounds to 13,660 during the early Thursday. In doing so, the pair registers three-day declines while also ignores downbeat Indonesia GDP data flashed the previous day. The reason could be traced from the positive performance of Asian shares.
Indonesia’s fourth quarter (Q4) GDP declined below 5.04% forecast and 5.02% prior to 4.97% on YoY, testing the lowest level in four years. The growth figure weakened to -1.74% versus -1.67% expected on QoQ. Earlier during the week, January month Inflation data from the Asian nation increased the odds of the Bank Indonesia’s (BI) further rate cuts in 2020.
Despite marking no cases of coronavirus infections off-late, the Indonesian economy has shut down its exports from China while also respecting the travel ban. However, the country will be waiving the overstay penalty for Chinese tourists during the restriction period. Also on the negative side could be a swine fever that killed hundreds of pigs in Bali.
Looking at the positive side, equity benchmarks from Japan, China, Hong Kong and Indonesia are all marking gains by the press time. The reason could be the recently published positive data from the US, EU and the UK, not to forget the expectations that China won’t refrain from acting too aggressively to safeguard its economy.
Moving on, traders will now concentrate on the coronavirus updates as well as data from the major economies for fresh impulse ahead of Friday’s US employment numbers. It’s worth mentioning that there have been more than 560 deaths in China due to the lethal coronavirus so far till February 05.
Technical Analysis
A downward sloping trend line ranging from November 2019, at 13,880 now, keeps the pair’s run-up towards 14,000 doubtful while also dragging the quote in the direction to a monthly low near 13,600.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.