Thursday’s trade saw USD/PKR within the range 154.00-154.63. The pair closed 0.03% lower at 154.00, as risk-off mood continued to persist amid spreading coronavirus infection in China and rising death toll.
”The U.S. dollar and the yen have been the safe havens of choice as the virus spreads and we expect these safe havens will remain well supported in the next few weeks,” Colin Asher, a senior economist at Mizuho Bank in London, was quoted as saying by Reuters.
Meanwhile, on the US macroeconomic front, a report by the Commerce Department showed economy expanded at an annualized rate of 2.1% during the fourth quarter, while matching the rate of increase in Q3. For the full 2019, US GDP rose 2.3%, or at the slowest rate since 2016 and decelerating from 2.9% growth registered in 2018. Actual GDP growth fell well short of the government’s 3% growth objective despite the $1.5 trillion tax cut package. This has been the latest piece of macro data to support the Fed’s recent policy decision.
The US Dollar Index was up 0.08% to 97.95 in late Asian trade on Friday.
In terms of economic calendar, today’s focus will be on US PCE inflation report at 13:30 GMT. The Core Personal Consumption Expenditure (PCE) Price Index, which does not include prices of food and energy and represents the Federal Reserve’s preferred measure of inflation, is expected to increase 1.6% year-on-year in December, or matching the rate in November. In case the index increases more than expected and approaches the Fed’s inflation objective of 2%, this would have a moderate bullish effect on the USD.
At 14:45 GMT ISM-Chicago Inc. will report on manufacturing activity in the region. The Chicago Business Barometer probably remained in the contraction area for a fifth straight month in January, according to market expectations, coming in at 48.5. In December, the gauge was reported at 48.9, as the sub-indexes of production, new orders, order backlogs, employment and inventories remained in the area below 50.0.
The monthly survey by Thomson Reuters and the University of Michigan may show that US consumer confidence remained unchanged in January from a month ago. The final index reading, scheduled for release at 15:00 GMT, probably came in at 99.3, up from a preliminary value of 99.1. In November, the consumer sentiment index stood at a final 99.3 or the highest since May. In case expectations were exceeded, this would have a moderate bullish effect on the USD.
USD/PKR was up 0.29% at 154.45 in late Asian session on Friday.
