The Pakistani Rupee traded flat versus the US dollar on Monday despite Chinese authorities lifting some work restrictions and implementing measures to support the Chinese economy amid the ongoing coronavirus outbreak. The US dollar Pakistani Rupee exchange rate closed Monday’s session flat at 154.650.
The Pakistani Rupee is cautiously strengthening versus the greenback in early trade on Tuesday as coronavirus fears ease and as investors look ahead to Federal Reserve Chair Jerome Powell’s two-day appearance before Congress.
Pakistani Rupee
The Pakistani Rupee was under pressure in the previous session after the International Monetary Fund warned of the negative impact of coronavirus on the Pakistani economy. The IMF highlighted concerns of a spillover effect from the slowing Chinese economy, which it believes will drag on Pakistan’s GDP growth in the current fiscal year. The IMF forecast economic growth of 2.4%.
Pakistan authorities, however, rejected the claims, arguing that they do not believe that the coronavirus outbreak will have any spillover impact on the economy. They insisted that he target 3.3% GDP and inflation between 11-12% remain intact.
With no economic data due for release until later in the week, investor attention could remain on coronavirus and its impact on the Chinese and Pakistani economy.
US dollar
US dollar investors will be watching Fed Chair Jerome Powell closely in his semiannual testimony before Congress. Today Mr. Powell will testify in front of the House of Representative and tomorrow in front of the Senate.
Jerome Powell will give his views on the economy and also provide clues as to where monetary policy could be heading in the near future. He will be looking to do this in such a way that he is not tying himself or the Federal Reserve to a particular path of monetary policy.
His appearance comes at a key junction for the US economy as it is leaving behind a disruptive trade war with China and as the central bank faces an ongoing battle with low inflation, but with a strong labor market.
Analysts are broadly expecting an upbeat testimony from Jerome Powell, with an acknowledgement of the threat that coronavirus could bring to the global economy. An overly cautious Mr Powell could drag on demand for the dollar.
