Monday’s trade saw USD/PKR within the range 154.70-154.88. The pair closed flat at 154.70.
The imminent signing of the Phase One trade deal between the US and China later this week supported market sentiment on Monday amid lack of other significant announcements to head the market in a particular direction.
Easing fears of conflict in the Middle East, despite ongoing tensions in Iran, have also supported investor sentiment, but hardly contributed to the emerging market currency movement.
In political news, a guilty verdict and death sentence for Pakistan’s former military ruler Pervez Musharraf has been revoked by Lahore High Court on Monday. The formation of the court, which handed down the sentence to Musharraf, was unconstitutional, according to a government law officer.
In December, Musharraf was accused of high treason and subversion of Pakistan’s Constitution. The charges were related to Musharraf’s imposition of a state of emergency, under which all civil liberties, human rights and democratic processes in the country were suspended between November 2007 and February 2008. Musharraf has lived in self-imposed exile in Dubai since 2016.
Meanwhile, a report by the State Bank of Pakistan showed Pakistani workers abroad had remitted $2,097.23 million in December, or 15.25% more compared to November and 20.00% more compared to December 2018. During the first six months of fiscal year 2020 (or July to December), the inflow of workers remittances amounted to $11,394.91 million compared to $11,030.01 million during the same period of fiscal year 2019.
The US Dollar Index was 0.02% weaker to 97.35 in late Asian trade on Tuesday.
From a macroeconomic perspective, today market players will be paying attention to the US CPI report at 13:30 GMT. The annualized consumer inflation in the country probably decelerated to 2.0% in December, according to expectations, from 2.1% in November.
The annualized core consumer inflation, which is stripped of prices of food and energy, is expected to remain stable at 2.3% for a third straight month in December.
If the general Consumer Price Index tends to approach the inflation objective set by the Federal Reserve (a level close to 2%), this would support the USD. USD/PKR was edging up 0.11% to 154.87 in late Asian session on Tuesday.