Global Macro Snapshot: Currency Resilience, Cooling Inflation and Labour Market Weakness

Rupiah Firms on Foreign Inflows, Steady Reserves

The Indonesian rupiah firmed to near IDR 17,900 per U.S. dollar on Friday, inching higher after the prior session’s losses as renewed foreign inflows into government bonds and domestic equities in July ended several months of sustained selling. Sentiment was further lifted by subdued domestic inflation, with July’s headline rate easing to a three-month low amid government food stabilisation efforts alongside the harvest season in parts of Java. Fresh data also showed Indonesia’s forex reserves remained broadly stable in July, underscoring resilient external buffers. Meanwhile, the dollar index was little changed as investors awaited the closely watched U.S. July jobs report for fresh clues on labor market strength and the Fed’s policy outlook. For the week, the rupiah was on track for its first weekly gain in three, rising about 0.5% so far, supported by improving fiscal sentiment after President Prabowo’s administration recently announced notable cuts to its flagship spending program.

Estonia Inflation Rate Lowest in Over 5 Years

The annual inflation rate in Estonia edged down to 2.2% in July 2026 from 2.3% in the previous month. This marked the softest rise since April 2021, driven largely by continued declines in prices for food and non-alcoholic beverages (-1.6% vs -1.5% in June) and recreation, sports and culture (-2.6% vs -0.2%). Price growth also slowed for alcoholic beverages and tobacco (6.4% vs 8.9%), health (2.7% vs 3.2%), transport (5.4% vs 7.5%), information and communication (0.4% vs 0.8%), education (4.7% vs 5.2%), and miscellaneous goods and services (3.6% vs 4.8%). Meanwhile, housing costs continued to increase (8.3% vs 7.6%), while prices rebounded for household goods (0.1% vs -0.5%) and restaurants and accommodation services (1.3% vs -2.0%). Deflation also eased in clothing and footwear (-3.1% vs -6.2%) and insurance and financial services (-4.1% vs -7.2%). On a monthly basis, consumer prices rose 0.5% in July, rebounding from a 0.5% decline in the previous period.

France Jobless Rate Rises to Highest Since 2020

The unemployment rate in France rose to 8.3% in the second quarter of 2026 from 8.1% in the previous quarter, topping market forecasts of 8.2%. It was the highest level since the third quarter of 2020, with the number of unemployed people rising by 62,000 to 2.7 million. Compared with the same period last year, the jobless rate was 0.7 percentage points higher. Unemployment increased across all age groups. The rate for those aged 15-24 picked up to 21.6% from 21.2% in the previous quarter. Among those aged 25-49, it rose to 7.5% from 7.3%, reaching the highest level since Q1 2021. For people aged 50 and over, the rate increased to 5.5% from 5.2%, marking the highest level since Q1 2022. By gender, the male unemployment rate was unchanged at 8.5%, the highest level in five years, while the female unemployment rate rose to 8.2% from 7.8%. The employment rate for people aged 15-64 fell to 69.0% from 69.3%, while the activity rate edged down to 75.4% from a record of 75.5%.

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