USD/PKR is trading in the middle of its daily range between 154.13 – 154.32 as of 10:00 GMT.
The Rupee Edges Higher On More Stable Economy
PKR is showing resilience despite continued fears over the spread and economic impact of coronavirus. Risk sentiment across the financial markets has taken a big hit this week, with stocks markets throughout the globe tanking as investors sell out of riskier assets. Yet despite the rotation out of riskier investments, the Pakistani rupee is holding up well and edging cautiously higher versus the greenback.
The domestic picture in Pakistan has improved as the government has worked hard to stabilise the economy. Pakistan has climbed up 28 places in the World Bank’s Ease of Doing Business Report following a series of investment friendly policies from the government. Prime Minister Imran Khan said the focus is now on social-economic growth.
Economic positivity has been evident in improving data and the resilient rupee; however, it has also been reflected on the Karachi stock exchange (KSE) which registered a 16-month high earlier this month, pushing over 42,000 after gaining 13,000 points in just 4 months.
US Dollar Nervous Of A Fed Rate Cut
The US dollar is holding steady on Wednesday after a broad sell off in the previous session. Whilst the US dollar has benefited from its safe haven status as the coronavirus outbreak worsens, investors are starting to question the impact that the outbreak could have on the US economy.
On Tuesday Federal health authorities warned that the spread of coronavirus in the US was expected to worsen. Authorities are unsure how severe the outbreak will be, however the warning was enough to frighten investors. The US stock exchange plummeted 3% for a second straight session. The dollar also lost its appeal as investors weighed up the prospect of the Federal Reserve cutting interest rates on the back of a coronavirus economic slowdown.
Today investors will remain focused on coronavirus headlines. There is also some mid-tier US housing numbers.