Thursday’s trade saw USD/PKR within the range 154.00-155.00. The pair closed 0.52% lower at 154.00, or a level unseen since June 24th.
Investor risk appetite resumed, trimming demand for safe haven assets, as fears over further escalation to US-Iran tensions subsided. US President Trump abstained from ordering the use of military power against Iran, while Iranian foreign minister Zarif said missile attacks “concluded” the Islamic country’s response.
Investor focus will probably now shift towards a global macroeconomic outlook ahead of the official signing of the trade agreement between China and the US next week.
Chinese commerce ministry said on Thursday that the country’s Vice Premier Liu He will visit Washington on January 13th-15th to sign the “Phase One” trade deal with the US. Gao Feng, spokesperson for the commerce ministry, said the China and US negotiating teams remained in close communication on the particular arrangements of the signing.
Meanwhile, Federal Reserve Vice Chairman Richard Clarida said in New York that last year’s rate cuts were “well timed” and “the current stance of monetary policy likely will remain appropriate”. The strong US labor market is not yet pressuring inflation, which is expected to “gradually” near the bank’s 2% symmetric target.
The weekly report by the US Labor Department showed the number of Americans filing for unemployment assistance had dropped more than expected to 214 000 during the business week ended January 3rd from a revised up 223 000 in the preceding week. It has been the lowest number of claims since the last week of November.
The US Dollar Index was 0.01% weaker to 97.40 in late Asian trade on Friday.
Today’s market focus will be on the more comprehensive non-farm payrolls report, which reflects employment in US, public and private sectors. Employers in all segments of US economy, excluding the farming industry, probably added 160 000 new jobs in December, according to market expectations, after a job gain of 266 000 in November. The latter has been the largest increase in payrolls since January. Higher-than-expected job growth in December would have a considerable bullish effect on the USD, because of positive implications regarding labor market strength and consumer spending.
Meanwhile, the rate of unemployment in the country probably remained stable at 3.5% in December, according to estimates. The official government report is due out at 13:30 GMT.
USD/PKR recouped part of earlier losses, being up 0.51% to 154.79 in late Asian session on Friday.