USD/PKR has distanced from lows unseen since early July on Monday amid lack of major reports and events. Some caution took hold before the approaching deadline on trade as well as the FOMC’s policy meeting.
Developments around US-China trade negotiations will be in the spotlight this week. Washington’s next round of tariffs on Chinese imports is due to come into effect on December 15th. Chinese Assistant Commerce Minister Ren Hongbin said that Beijing hoped to reach a trade deal with the US, which satisfies both sides, as soon as possible. It still remains unclear if a “phase-one” agreement can be reached in the near term.
Yet, some analysts expressed optimism the implementation of December tariffs may be postponed, as talks are ongoing and, according to US President Trump’s comments from last week, headed in the right direction.
The US Dollar Index was down 0.03% to 97.575 in late Asian trade on Tuesday.
From a macroeconomic perspective, no volatility-inducing reports are scheduled to be released today. Market focus will likely now shift towards the key US CPI inflation report on Wednesday and retail sales report on Friday, as well as the outcome of the Federal Open Market Committee’s two-day policy meeting, which commences today. Market players will be paying attention to the tone (rather dovish or rather hawkish) used by Fed’s Chairman Jerome Powell during the press conference following the bank’s interest rate decision tomorrow.
The Fed’s Economic Projections report, focusing on inflation and economic growth outlook over the upcoming two years, will also be closely examined. USD/PKR was edging up 0.12% to 154.940 in late Asian session on Tuesday.