USD/PKR Maintains Stability as China Announced Tariffs Reduction, NFP Eyed Next

Thursday’s trade saw USD to PKR within the range 154.30-154.58. The pair closed flat at 154.30, after an unexpected announcement by China concerning tariffs on US imports seemed to have quelled pessimism about macroeconomic effects of the Wuhan-originated coronavirus.

China said that additional tariffs, imposed on 1 717 US goods in September 2019, would be halved, after the “Phase One” trade deal between the two countries has already been signed. The cuts are to come into effect at 05:01 GMT on February 14^th. Beijing’s announcement is also considered by analysts as a move aimed at improving business confidence as the coronavirus outbreak has had an impact on a number of businesses and has also weighed on market sentiment.

Meanwhile, the US Labor Department’s weekly report on jobless claims added to the recent string of upbeat data, with the number of Americans filing for unemployment benefits decreasing to 202 000 during the business week ended January 31^st from 217 000 in the prior week. It has been the lowest number of claims since the business week ended April 12^th 2019.

The spread between 3-year Pakistani and 3-year US bond yields, which reflects the flow of funds in a short term, narrowed to 10.814% (1081.4 basis points) on February 6th from 11.061% (1106.1 basis points) on February 5th.

The US Dollar Index was 0.01% weaker to 98.47 in late Asian trade on Friday, but remained in proximity to yesterday’s 16-week high of 98.57.

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 165 000 new jobs in January, according to market expectations, after a job gain of 145 000 in December. Higher-than-expected job growth in January would have a considerable bullish effect on the USD, because of positive implications regarding labor market strength and consumer spending respectively.

Meanwhile, the rate of unemployment in the country probably remained stable at 3.5% or the lowest level since 1969, in January, according to estimates. The official government report is due out at 13:30 GMT.

USD/PKR was up 0.03% at 154.35 in late Asian session on Friday.

Currencylive.com is a news site only and not a currency trading platform.

Currencylive.com is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views.