What is USD/IDR?
USD/IDR refers to the exchange rate between the United States dollar (USD) and the Indonesian rupiah (IDR), or how much one US dollar is worth in Indonesian rupiah.
The IDR is the official currency of Indonesia and is managed by its central bank, the Bank of Indonesia (BI).
The US dollar is the most traded currency in the world and is held by most central banks and investment institutions. Its dominance in international trade has significant implications for exchange rates and economic policies worldwide, and it can serve as a benchmark for nations that choose to set or peg their currencies to the dollar's value. It is managed by the United States Central Bank, and the US Federal Reserve.
What affects the price of the USD/IDR pair?
Various economic and geopolitical factors can affect the price of the USD/IDR currency pair. For example, trade relations, trade agreements, tariffs, and trade balances can influence the flow of goods and capital between the two countries.
Indonesia is a major exporter of commodities such as palm oil, coal, and minerals. Therefore, fluctuations in the prices of these commodities can affect Indonesia's economy and, consequently, the IDR's value.
Monetary policy decisions made by the US Federal Reserve and the Bank of Indonesia regarding interest rates and other monetary policy measures can influence the USD/IDR exchange rate. Higher interest rates in the US can attract foreign capital and potentially strengthen the USD.
Economic indicators can also impact the exchange rate. Strong economic performance in the United States or Indonesia can lead to currency appreciation.
What to watch out for when trading USD/IDR?
Investors interested in trading the USDIDR forex pair should watch out for key economic indicator releases by the US and Indonesia, which could affect the exchange rate. Strong economic performance in either country can lead to currency appreciation. Those include:
- US and Indonesia Gross Domestic Product (GDP) growth, Unemployment Figures, Trade Balance, Consumer Price Index (CPI) Inflation Rates, manufacturing and services Purchasing Managers Index (PMI), and Consumer Sentiment
- US Federal Reserve (the Fed) and Bank of Indonesia Interest Rate decisions
