Indonesian Rupiah Slides as US Dollar Gains Despite Easing Rate Hike Odds
The Indonesian Rupiah declined as the US Dollar gained ground despite easing Federal Reserve rate hike odds. The USD/IDR currency pair traded around 17,670 during Asian hours on Friday, pushing higher after the US Dollar rebounded from intraday losses.
However, further upside for the Greenback may be constrained by softening hawkish expectations surrounding the Fed's monetary policy path. Federal Reserve Governor Christopher Waller recently signaled a preference for holding interest rates steady at the upcoming September meeting, assuming upcoming inflation figures offer no major shocks.
This dovish tone contrasts with earlier hawkish remarks from Chairman Kevin Warsh and has caused market pricing to shift noticeably. The CME FedWatch tool shows the probability of a September rate hike falling to 50.2%, down from 63.2% the previous day.
Market participants are now turning their attention to the upcoming US August employment report for clearer guidance on the Fed's next moves, with consensus estimates projecting Nonfarm Payrolls to expand by 56,000 jobs and the national Unemployment Rate expected to hold firm at 4.1%.