The US dollar was under pressure versus its major peers; however it was trading marginally high versus the Pakistani Rupee. At 10:20 UTC the US dollar Pakistani Rupee exchange rate was trading 3 paisa higher at 154.25, after closing the previous session at 154.22. Coronavirus fears are weighing on both currencies in early trade on Thursday.
Pakistani Rupee Out Of Favour As Risk Sentiment Sours
The Pakistani Rupee is coming under pressure as fears of a coronavirus pandemic grow. Risk off continues to engulf financial markets, making perceived riskier currencies such as the Pakistani Rupee less attractive.
Economists expect the virus outbreak to have an adverse effect on the Pakistan economy. The outbreak is expected to have negatively impacted China, the world’s second largest economy and close trading partner of Pakistan. There is expected to be a trickle-down effect. Reports suggest that Pakistan imports are starting to feel the impact of the outbreak already, as the first two cases of the killer virus are confirmed. Neighbouring Iran is experiencing a rapid spread of the disease.
The Karachi stock exchange was also trending lower on Thursday, its sixth straight session of losses as investors move out of riskier assets.
US Dollar Rattled By Coronavirus Case
The US dollar was trading lower versus G10 currencies yet holding firm versus emerging market currencies as a case of coronavirus from an unknown origin sparked fears of the virus spreading rapidly across the US.
President Trump did little to calm investors nerves as he attempted to defuse criticism over his handling of the health crisis. Trump insisted that the threat to America remains low. Investors are clearly not convinced.
The dollar has moved lower as investors grow in confidence that the Federal Reserve will cut interest rates to support the economy amid a coronavirus outbreak. According to the CME Fedwatch tool, investors are seeing a 41% probability of the Federal Reserve cutting interest rates in March. The probability was just 23% earlier this week.
Today there are several high impacting US data points that US investors could look towards. These include US GDP and durable goods releases. Economic growth is the fourth quarter is expected to confirm 2.1% annual expansion. Durable goods, however, are expected to show a month on month decline of -1.5% in January, down from a 2.4% increase in December.