After weakening versus the US Dollar on Thursday the Pakistan Rupee is holding steady on Friday. At 10:20 UTC, USD/PKR is trading at 167.125. This is the same level that it closed yesterday’s session at and is just short of the all time high of 168.45.
Pakistani Government Reveals Expected Covid-19 Impact
As the number of coronavirus cases reaches 1 million worldwide, fears over the economic impact of coronavirus are driving the global financial markets. Dire economic macro data is being released across the world, revealing the devastating initial effect that the measures being taken to slow the spread of the virus are having on the global economy. This is creating a risk off climate.
In risk off conditions, investors move funds away from riskier emerging market assets and currencies, instead investing in safe havens.
Separately, the Federal Government of Pakistan shared official estimates of the impact of the pandemic on the economy. Losses are expected in the region of Rs2.5 trillion. Under moderate restrictions the employment losses could be 12 million, which equates to about 20% of the employed labour force. According to the Pakistan Institute of Development Economics (PIDE) a lingering pandemic could result in an increase in unemployment ranging from 12 million – 20 million.
100,000 Job Losses Expected in March NFP
The Dollar is advancing owing to its safe haven properties after the number of Americans filing for unemployment benefits soared to a once unimaginable, record breaking 6.6 million last week. As states shut down to prevent the spread of the coronavirus, millions of businesses are collapsing, and workers are being laid off.
Across the past two weeks unemployment claims have hit 10 million, revealing the level of damage that the coronavirus outbreak is wreaking on the US economy. Whilst the Federal Government has pledged aid to the tune of $2.2 billion, more could bee needed to shore up the US economy.
Today attention will turn to the US non-farm payroll. This is usually the most closely watched data release of the month. However, the data today is in danger of being out of date. Analysts are expecting 100,000 job losses in March. This figure is very low compared to the 10 million unemployment claims. The reason for this is because the payrolls take data up until 12th March. The first US state to go into lock down was California on 20th March. Therefore, April’s data will show a much truer picture on the hit to the jobs market.
