The Indonesian rupiah soared to the highest point since April 27 as concerns about the Indonesian economy continued. The USD/IDR exchange rate jumped to a high of 14,817, which was higher than this month’s low of 14,618.
Indonesian rupiah retreats
The USD to IDR exchange rate rose after the latest trade data from Indonesia. Data by the government showed that export growth slumped by 29.4% in April after falling by 11.6% in March. Analysts were expecting exports to plunge by 18.55%. It was the second straight month of decline and the worst plunge since May 2020.
At the same time, imports continued slumping in April of this year. Import growth dropped by 22.325 in April after falling by 6.26% and 4.32% in March and February, respectively. Import growth has plunged in the past three months.
As a result, Indonesia’s trade surplus increased to $3.94 billion in April from the previous $2.91 billion in March. In all, the country’s surplus has crashed from $7.56 billion in April 2022.
The USD/IDR exchange rate has jumped because of the strong US dollar. As I wrote here, the US dollar index has jumped to the highest level in five weeks. The dollar index has risen from the year-to-date low of $100 to $102.
Analysts cite several reasons for the rising US dollar index. The most important reason is that there is a flight to safety as the banking crisis escalates. Last week, the KRE ETF, which tracks regional banks, plunged by more than 5% in the past few days.
USD/IDR technical analysis
The USD/IDR pair has risen from a low of 14,615 to a high of 14,804. On the daily chart, the pair has moved below the 50-day exponential moving average and the key resistance point at 14,838. This was an important level since it was the lowest point on February 2.
The pair seems to be doing a break-and-retest pattern, which is usually a sign of a bearish continuation. At the same time, the Relative Strength Index (RSI) has moved to the neutral point. Therefore, there is a likelihood that the USD to IDR exchange rate will resume the bearish trend as sellers target the next key support at 14,670.
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