USD/PKR moved in a tight range just below the 155 mark in quiet Tuesday trade.
An array of factors, including improvement in Pakistan’s balance of payments, a steady inflow of foreign investments in Pakistani bonds, an upgraded outlook from negative to stable by Moody’s among others have led to an almost 5% appreciation of PKR against USD during the past six months, which pared the exotic pair’s year-to-date advance to just below 12%.
Investor optimism regarding US-China trade relations has also provided support to riskier assets. Still, markets expect details of the trade agreement between the world’s first two largest economies.
”The trade story is far from over, so Mr. Trump can continue the battle next year, and as long as it doesn’t impact US growth, it should play well with voters,” David Madden, an analyst at CMC Markets, was quoted as saying by Reuters.
The spread between 3-year Pakistani and 3-year US bond yields, which reflects the flow of funds in a short term, shrank to 10.436% (1043.6 basis points) on December 24th from 10.616% (1061.6 basis points) on December 23rd.
The benchmark equity index Karachi Stock Exchange KSE-100 Index closed up 0.80% at 40,328 on Tuesday. On Christmas day the Pakistan Stock Exchange and the bond market will remain close. Year-to-day the Pakistan Stock Exchange market is close to post around 8.80% returns.
With Tokyo being the sole Forex trading center open today, heavy volumes seem highly unlikely. The US Dollar Index was almost unchanged at 97.68 in late Asian trade on Wednesday.
USD/PKR was steady at 154.70 in late Asian session on Wednesday.
