USD/PKR was edging up 0.43% to 154.910 in late Asian session on Wednesday.
The announcement of a “phase one” trade deal still supported risk sentiment on Tuesday.
USD/PKR traded mostly below the 155 mark for a second straight day, seemingly ignoring a recent set of upbeat US macro data. Housing starts rose more than anticipated in November to a seasonally adjusted annual rate of 1.365 million units, while building permits rose to their highest level since May 2007 (1.482 million). The numbers suggested US housing sector was regaining momentum following three rate cuts by the Fed in 2019, which kept mortgage rates lower.
Additionally, a Federal Reserve report showed US industrial production had increased at a monthly 1.1% in November, while exceeding expectations, following a revised down drop of 0.9% in October. Output in manufacturing industry, which accounts for 11% of US economy, also surged past estimates, rising at a monthly 1.1% in November.
The data came out a few days after the US Commerce Department reported slower-than-expected retail sales growth in November, in spite of strong labor market, which raised certain concerns over consumer spending and economic growth in Q4.
Meanwhile, Donald Trump may become the third US president to be impeached, when the Democratic-dominated House of Representatives takes a vote on charges related with Trump’s effort to pressure Ukraine to investigate Joe Biden, a Democrat and contender in next year’s presidential election. Trump faces one accusation of power abuse by asking Ukraine to investigate Biden and another charge of obstruction of Congress’ investigation into that very matter.
The House will probably take up impeachment today, which could lead to a vote this week on whether the charges should be approved and the matter – sent to the Republican-dominated Senate.
In other political news, a court in Pakistan sentenced to death yesterday Pervez Musharraf, who came to power in a 1999 coup and then ruled as president, after accusing him of high treason and subversion of the country’s Constitution. The court has analyzed complaints, records; arguments and facts related to the case and have come to a majority verdict. The charges relate to Musharraf’s imposition of a state of emergency, under which all civil liberties, human rights and democratic processes in the country were suspended between November 2007 and February 2008.
The US Dollar Index was up 0.09% to 97.27 in late Asian trade on Wednesday.
From a macroeconomic perspective, no relevant reports are scheduled to be released today. Market focus will likely now shift towards US final GDP, PCE inflation and consumer sentiment data due out at the end of the week.
At 10:15 GMT today FOMC member Lael Brainard is expected to speak on “Monetary Policy, Technology and Globalization” at Colloquium in Honour of Benoît Coeuré in Frankfurt am Main, Germany. Any remarks concerning the Fed’s future policy or US macroeconomic environment would heighten USD volatility.
