The Pakistani Rupee has dropped sharply lower versus the US Dollar, after five straight sessions of gains. The Pakistani Rupee settled +0.45% higher against the greenback on Wednesday, at 158.82, the strongest close since late March.
At 10:15 UTC, USD/PKR is trading +1% higher at 160.40. This is at the upper end of the daily traded range of 158.82 – 160.63.
FAO Warns Locust Invasion Could Cause Rs600 Billion Loss
The Rupee is under pressure on Thursday after the UN’s Food and Agriculture Organisation (FAO) reported that the whole of Pakistan is under threat of an intense second wave invasion from locusts if the measures to contain it fails. The FAO said that the locust invasion could cause a loss of Rs600 billion to the Pakistan economy.
The Pakistan government is struggling to contain a second invasion of locusts amid the coronavirus crisis, which has also had a devastating impact on the Pakistan economy. Rural areas have been particularly hard hit by the double emergency.
Pakistan will start easing lockdown restrictions as it cannot afford indefinite closure, according to Prime Minister Imran Khan.
US Initial Jobless Claims In Focus
The US Dollar is pushing higher on Thursday as investors look ahead to the release of initial jobless claims data for the week of 1st May. Analyst are expecting 3 million Americans to have signed up for unemployment benefits that week. This would take the total across the 7-week coronavirus crisis period to 33 million Americans. This equates to around 20% of the US labour force.
Whilst this is down 56% from the top, it is still a very high number given that several US states are reopening their economies. It is worth remembering that the greatest number of initial jobless claims in the financial crisis was 665,000, a number that pales in significance to the eye watering numbers seen each week over the past 7 weeks. A weak number could boost demand for the safe haven US Dollar.
The data comes after the ADP Private payroll report, which revealed that 20.2 million private sector jobs were lost in April. However, this is only half the story. Investors will now look ahead to the Labour department’s non-farm payroll report tomorrow. This will lay bare the devastating impact that the coronavirus lockdown is having on the labour market.