The Pakistani Rupee is edging lower on Wednesday after four straight sessions versus the US Dollar. The Pakistani Rupee settled +0.3% versus the US Dollar on Tuesday at 159.55, a level last seen at the end of March.
At 10:15 UTC, USD/PKR is trading +0.1% higher at 159.70. This is approximately a mid-point in the daily traded range of 158.87 – 160.07.
Pakistan’s Covid-19 Cases Pass 20,000
The Pakistani Rupee is coming under pressure on Wednesday after the number of coronavirus cases in the county passed a concerning milestone. Pakistan reported that the number of confirmed infections has reached 22,413 with a death toll of 526. A record 40 deaths were recorded on Tuesday.
The data comes after Prime Minister Imran Khan announced earlier in the week that the country’s lockdown would be gradually lifted, as Pakistan’s economy can’t afford an indefinite closure.
The impact that covid-19 is expected to have on Pakistan’s economy varies according to different experts. Moody’s rating agency predicts that the economy will contract by -0.1% – -0.5%, the central bank is forecasting a -1.5% contraction whilst the IMF and World Bank expect a contraction in the region of -1.3% to -1.5%. The difference between the forecasts illustrates how challenging it is to forecast accurately whilst the outlook lacks visibility.
US Private Payrolls In Focus
The US Dollar is advancing across the board on Wednesday amid a mixed mood in the market and as investors look ahead to the release of the US ADP private payroll report. The ADP report is closely watched because it is a strong lead indicator for the US Labour Department’s non-farm payroll report due on Friday.
Analysts are expecting the private sector to show a drop of 20 million in April. To put this into context, it took the private sector almost a decade to create 20 million jobs. All the jobs created over 108 months will be wiped out in just 1 month. Initial jobless claims data over the past 6 weeks has provided plenty of warning over the extent of the damage that the coronavirus lock down is inflicting on the labour market. Even so, a weaker than forecast figure could move the US Dollar.