On the interbank market, Pakistani Rupee settles at 156.40 for 6 consecutive days. During early Asia trading hours, the USD/PKR exchange rate was seen quoted inside its range established by the SBP.
The State Bank of Pakistan (SBP) reported that the Pakistani Rupee was traded at Rs 155.38 against Rs 156.40 in the currency market. The risk-off environment may weigh over the Pakistani Rupee as well. The US equity index S&P 500 closed down on Wednesday for the second consecutive day. The benchmark equity index closed down at 3108 registering a -0.38% loss amid the US – China trade tensions.
The US President Donald Trump reiterated again that his administration is ready to impose more tariffs on China, if the world’s second biggest economy doesn’t concede to a trade deal that is favorable to the USA.
The risk-off environment has been often synonymous with depreciation of emerging market currencies. It’s no surprise that Pakistani Rupee closed lower tracking the weakness of other Asian currencies.
The US Federal reserve hinted that there are no more reasons for further rate cuts which, at least in theory should motivate risk-adverse investors pile into emerging market currencies.
“Most participants judged that the stance of policy, after a 25 basis point reduction at this meeting, would be well calibrated to support the outlook of moderate growth, a strong labor market and inflation near the committee’s symmetric 2% objective,” the Fed said in the minutes – citing Reuters.
The benchmark equity index Karachi Stock Exchange KSE-100 Index closed down 1.17% at 37593 on Wednesday. Year-to-day the Pakistan stock exchange market is up 1.42%. The Pakistan 10-year government bond yield gaped higher and closed at 11.562 versus 11.297 previous closing rates.
On the other hand, the dollar index, which gauges the greenback’s strength against a basket of major currencies, was seen trading slightly lower at 97.86 during London trading hours.
USD/PKR Technical Pattern
On the technical front, the USD/PKR exchange rate is trying to challenge again the unofficial peg established at the 155.00 support level. The worsening market sentiment could keep the Pakistani Rupee exchange rate under pressure.