With financial markets still in full on risk aversion mode, the Pakistani Rupee is heading lower again on Tuesday. Pakistani Rupee declined 1% versus the YS Dollar in the previous session.
Today, at 10:30 UTC, USD/PKR was trading at 159.30, after opening the session at 158.75. It is trading at the upper end of it s daily trading range of 158.20 – 159.30.
Pakistani Rupee Interest rate Decision Due
The Pakistani Rupee has declined over 3% versus the US Dollar across recent sessions as investors flee riskier markets. The State Bank of Pakistani has said that it is ready to take action to support financial markets during the coronavirus outbreak. The global pandemic has led to a selloff in the country’s bond.
Up to now there have been 194 cases and one death in the country but the numbers are expected to escalate.
The State Bank of Pakistan’s Governor Reza Baqir and his policy committee will be under the spotlight today as they meet to consider the future of interest rates. The meeting will happen as the backdrop for the Pakistan economy becomes increasingly challenging owing to the coronavirus outbreak.
US Dollar Rises On Safe Haven Trade
The US Dollar is advancing across the board on Tuesday as investors continue to seek out its safe haven properties. With countries across the globe closing borders, partially or fully locking down or encouraging social distancing to protect from coronavirus, investors are fearing a recession.
With the supply chain collapse, panic in the financial sector and the collapse of in airline travel, hotel stays and leisure activities, analysts are expecting to see a quarterly contraction similar to that seen in the 2008/9 financial crisis.
The Federal Reserve, on Sunday evening, slashed interest rates for a second time in a week. US interest rates are now 0% – 0.25%. The Fed also announced other easing measures such as buying up $700 billion in bond purchases.
Today sees the release of US retail sales data. Analysts are forecasting a 0.2% increase month on month in sales. This would be down slightly from 0.3% in January. However, investors are unlikely to pay much attention to the release given that it was from before coronavirus really struck the US.