The Pakistani Rupee is weakening against the US Dollar on Tuesday as investors remain gripped on the latest coronavirus developments.
At 10:15 UTC, USD/PKR is trading at 159.20 after closing the previous session at 158.2. The Pakistani Rupee continues to trade around its record low of 159.8 reached last week.
Pakistani Rupee Declines As Unemployment Set To Rise
The Pakistani Rupee is trading on the back foot, despite an improved mood in the global markets. The decline in the Pakistani Rupee comes as renowned economists from the Pakistan Institute of Development Economics (PIDE) reported that Pakistan could expect between 12.3 million – 18.5 million layoffs in different sectors of the economy, amid the shutdown of the economy owing to the coronavirus outbreak.
The paper also highlighted three stages through which the virus could impact the economy. The average monthly loss of stage 1 was estimated to be in the region of Rs22 billion, stage 2 at Rs187 billion and stage 3 Rs261 billion. The paper called for the government to do more to reach out to workers that are laid off.
US PMI Data Up Next
The US Dollar was trading broadly lower versus its peers on Tuesday, albeit higher versus the Pakistani Rupee, as risk sentiment picked up across the financial markets. The number of deaths in Italy, the new epicentre for coronavirus fell for a second straight day, providing a glimmer of hope that coronavirus cases in Italy could have peaked. This us around 2 weeks after the strict lock down was implemented.
Also boosting sentiment was action taken by the Federal Reserve on Monday. The US central bank announced an unlimited bond buying programme as it attempts to protect the US economy from the deep economic contraction coming. The Fed also announced that it will also buy corporate debt in addition to government bonds.
The move by the Fed comes as Congress are slowly making progress towards ageing a $2 trillion rescue package to prop up the US economy.
Today investors will look ahead to US purchasing managers index data. Analysts are expecting US manufacturing activity to 42 in March, down from 53 in February. The service sector is expected to see a bigger hit, with activity declining to 40, down from 49.7.
