USD/PKR: Pakistani Rupee Remains At 7 Month High vs USD

The Pakistani Rupee is trading marginally higher versus the US dollar on Friday paring losses from the previous session. At 10:00 GMT the US dollar Pakistani Rupee is trading at Rs 154.175 after opening the session at 154.345.

Across the week the Pakistani Rupee has advanced 0.2% against the buck, its second straight week of gains as the rupee trades at a 7-month high versus the greenback.

Pakistani Rupee

The Pakistani Rupee has advanced versus the US dollar despite coronavirus concerns hitting sentiment across the financial markets. The number of people infected is now over 63,000 and the number of deaths above 1300 following China new diagnostic methodolgy. With the number of cases still increasing sharply it is far too early to be able to gauge the impact that the virus will have on the Chinese economy and the spillover effect on the global economy. China is a close trading partner of Pakistan’s; the IMF has warned of a potential slowdown to economic growth.

The Pakistan economic calendar has been light this week. Investors will now look ahead to Monday’s balance of trade. Investors will be keen to see whether imports continue to fall and whether export growth remains a challenge.

US dollar

The US dollar is trading broadly flat versus its peers in early trade on Friday as investors assess the latest coronavirus statistics and as several key macro data releases move into focus. Later in the session the US retail sales, industrial production and consumer confidence figures will all be released.

Recent US data has painted a solid picture of the US economy. Job creation is strong, wages rising and overnight the New York Federal Reserve felt confident enough about the banking sector to announce that it will be cutting the volume of its open market operations ahead of schedule. This move will have the effect of tightening liquidity in the funding market. With less fewer dollar available the price inches higher. However, the Fed are unlikely to be taking any larger policy moves in the near future.

Inflation data on Thursday showed that inflation increased 0.1% month on month in January. This is the slowest rate of increase in 4 months. Federal Reserve Chair Jerome Powell said earlier this week that he considers monetary policy to be appropriate.

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