USD/PKR: Pakistani Rupee to be Impacted by Geopolitical Risks

While the Pakistani Rupee remains stable on the currency market, any intensification of the geopolitical risks can impact the USD/PKR rate. On the interbank market, Pakistani Rupee closed down by -0.13% settling at 155.30. During early Asia trading hours, the USD/PKR exchange rate was seen quoted higher at 155.58.

The State Bank of Pakistan (SBP) reported that the Pakistani Rupee was traded at Rs 155.35 against Rs 156.40 in the currency market.

Despite mounting geopolitical risks the markets have noticed some easing pressures. The news about China cracking down on intellectual property rights violations has been interpreted as a positive sign by currency investors uplifting the market sentiment. The probability of a trade agreement is now back in the cards.

Hong Kong’s pro-democracy forces secured a landslide victory in Sunday’s local election, which helped improve the market sentiment. After over six months of violent anti-government protests, the Hong Kong election results may temper one of the worst political crises in decades.

Hong Kong’s Heng Seng index edges higher following the election results and settled at 26993 registering a 1.50% gain. This has motivated positive gains across most Asian stock indices.

Looking ahead over the economic calendar, the US GDP data for the third quarter of this year should provide more clarity on the US dollar’s direction. According to the market consensus the 3 GDP is set to inch higher to 1.7% versus 1.6% previous reading.

The benchmark equity index Karachi Stock Exchange KSE-100 Index closed down 0.14% at 38159 on Monday. Year-to-day the Pakistan stock exchange market is up 2.64%. The Pakistan 10-year government bond yield gapped higher and closed at 11.675 versus 11.403 previous closing rates.

On the other hand, the dollar index, which gauges the greenback’s strength against a basket of major currencies, was seen ending last week on positive territory closing at 98.29 registering a modest 0.02% gain.

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. In the short-term, the Pakistani Rupee should remain glued to the big round number.

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