Tuesday’s trade saw USD/PKR within the range 154.70-154.87. The pair closed at 154.70 for a third straight trading day.
Washington’s decision to lift its designation of currency manipulator on China has added to investor optimism, a mood that has already been present ahead of the official signing of the US-China trade deal.
According to a report by Reuters, citing a source, China has vowed to buy nearly $80 billion of additional manufactured goods from the United States during the upcoming two years. Under the terms of the “Phase One” deal expected to be signed today, the Asian country would also bolster purchases of energy supplies by over $50 billion and purchases of US services by almost $35 billion over the same period.
On the macroeconomic front, a report by the US Labor Department showed annual CPI inflation had accelerated to 2.3% in December from 2.1% in November. December’s rate has been the highest since October 2018, fueled by a sharp rebound in energy costs.
Annual core CPI inflation remained stable at 2.3% in December, also meeting market expectations. Meanwhile, Federal Reserve President for New York John Williams offered no remarks regarding US macroeconomic outlook or Fed’s monetary policy on Tuesday at the London School of Economics and Political Science.
The US Dollar Index was 0.05% weaker to 97.34 in late Asian trade on Wednesday.
At 13:30 GMT today the Bureau of Labor Statistics is to report on the US Producer Price Index performance. Annual producer prices probably rose 1.2% in December, according to market consensus, accelerating from 1.1% in November (the slowest increase since October 2016).
Meanwhile, the nation’s annualized core producer price inflation, which excludes prices of food and energy, probably accelerated to 1.4% in December from 1.3% in November. Faster-than-anticipated PPI acceleration would have a limited bullish effect on the USD, as it would suggest potentially higher consumer price inflation.
At 16:00 GMT Philadelphia Federal Reserve Bank President Patrick Harker is expected to speak on “Monetary policy Normalization: Low interest rates and the new normal” during the Official Monetary and Financial Institutions Forum at the Harvard Club of New York City. His remarks will be closely watched.
USD/PKR was up 0.03% to 154.75 in late Asian session on Wednesday.
