At 10:30 UTC USD/PKR is trading at 158.65, after having opened the session at 159.2, a jump up from yesterday’s close of 158.48. The Pakistani Rupee was almost unmoved against the US Dollar in t he previous session, despite the US Dollar soaring versus virtually all of its peers.
Moody’s Downgrades Pakistan GDP
The Pakistani Rupee continues to hover around an all time low as investors remain extremely cautious over the impact of coronavirus on the global economy. As more draconian measures are being implemented across the globe to slow the spread of coronavirus, investors have grown increasingly fearful over the impact that such measures will have on the global economy.
Investors have rotated out of riskier investments into the safe haven dollar, whilst businesses are hoarding dollars over fears of harder times ahead.
The Pakistan Rupee is also under pressure after rating agency Moody’s lowered its forecast for Pakistan’s economic growth to 2.5% for the fiscal year, owing to coronavirus. In December, the rating agency had forecast Pakistan’s growth rate at 2.9% for the current year.
US Dollar Looks To Washington
The US is has risen versus the Pakistani Rupee, however it is broadly lower versus its peers. The greenback is pausing for breath after soaring across the week owing to its safe have properties.
The US dollar even pushed higher in the previous session despite dismal US economic data which is starting to show the impact of the coronavirus outbreak on the US economy. US jobless claims surged 70,000 to 281,000 in mid-March as coronavirus triggered layoffs in US firms. Treasury Secretary Steve Mnuchin also warned that the coronavirus outbreak could propel the unemployment rate in the US to 20%.
There is no high impacting US economic data today. Investors are not expected to pay much attention to mid-tier US new home sales given that the figures are from February.
Focus will turn to Washington where the Senate will debate a $1 trillion recue package which is aimed at providing direct financial support to Americans and businesses to cushion the coronavirus impact. A large rescue package such as this could go some way to calming the market.