Key Moments
- USD/IDR trades around 18,000 on Friday in Asia after earlier minor losses, supported by a firm U.S. Dollar.
- June U.S. Nonfarm Payrolls increased by 57,000 versus expectations of 110,000, while unemployment edged down to 4.2%.
- Indonesia posted a surprise $1.61 billion trade deficit in May alongside June inflation at 3.34%, raising pressure on the rupiah.
USD/IDR Advances as Dollar Holds Up After Weak U.S. Jobs Report
USD/IDR is moving higher during Friday’s Asian session, trading around the 18,000 level after recording small declines in the prior session. The pair is gaining as the U.S. Dollar (USD) remains resilient despite a weaker-than-expected batch of U.S. labor data released on Thursday.
The June Nonfarm Payrolls (NFP) report, published on Thursday, prompted a significant reassessment of interest rate expectations on Wall Street. The U.S. economy generated 57,000 new jobs in June, far below the consensus forecast of 110,000. At the same time, the unemployment rate unexpectedly slipped to 4.2% from May’s 4.3%, but the pronounced deceleration in job creation pointed to a cooling labor market and broader economy.
In response, traders reduced their expectations for tighter monetary policy. According to the CME FedWatch tool, the probability of an interest rate hike at the September Federal Reserve meeting fell to 52%, down from 66% immediately before the jobs data.
Fed Commentary: Inflation Risks Seen Easing
Recent comments from Federal Reserve Chair Kevin Warsh at the ECB’s Sintra conference underscored the central bank’s focus on its 2% inflation target. Warsh reiterated the Fed’s independent pursuit of price stability and noted that both inflation risks and expectations had begun to ease over the past month.
Indonesia’s Trade and Inflation Pressures Undermine the Rupiah
On the domestic side, Indonesia is confronting increasing economic headwinds that are weighing on the rupiah. The country recorded an unexpected trade deficit of $1.61 billion in May, its first deficit since 2020, as exports declined and imports accelerated. At the same time, inflation reached a three-month high of 3.34% in June.
These developments have raised concerns about external stability. Fitch Ratings has cautioned that shrinking foreign exchange reserves could start to put Indonesia’s credit rating at risk if the trend continues.
| Indicator | Latest Reading | Context |
|---|---|---|
| USD/IDR | Around 18,000 | Trading higher in Friday’s Asian session after prior minor losses |
| U.S. Nonfarm Payrolls (June) | 57,000 | Below expectations of 110,000 |
| U.S. Unemployment Rate (June) | 4.2% | Down from 4.3% in May |
| Fed September hike probability (CME FedWatch) | 52% | Down from 66% before NFP release |
| Indonesia trade balance (May) | -$1.61 billion | First deficit since 2020 |
| Indonesia inflation (June) | 3.34% | Highest in three months |





