At 10:20 UTC, USD/PKR is trading -0.2% at 159.80 after hitting a low week low of 156.20 earlier in the session. The Pakistani Rupee continues to pick up from its all time low of 168.42 struck at the end of March.
US – Sino Tensions Ease
A economies across the globe start to gradually reopen following lock down, risk appetite has increased boosting demand for riskier assets and currencies. As a result, the Pakistani Rupee has gradually picked up from its all time low of 168.42 hit at the end of March.
Today the upbeat mood in the market came following a constructive conference call between the US and China on trade. The two powers concluded that good progress had been made on implementing the Phase One trade deal. The call has eased fears of rising US – Sino tensions.
21.5 Million US Job Loses In April
Rising risk sentiment has hit demand for the safe haven US Dollar. Investors will now turn their attention towards the release of the US labour department’s jobs report, the non-farm payroll. Analyst are expecting the report to show that 21.5 million jobs were lost in April. The unemployment rate is also expected to jump to 16%, up from 4.4% last month. The last time that the jobless rate was in double digits was in 1983.
However, investors have had plenty of warning that the numbers will be horrendous. Initial jobless claims over the pat 7 weeks have pulled up eye watering numbers showing 33 million Americans signed up from unemployment benefits over a 7-week period. The employment components on the ISM manufacturing and non-manufacturing PMI reports were also historically low. As the data has been released the US Dollar investors have looked through the figures, instead focusing on the gradual reopening of states.
How the US Dollar responds depends largely on whether investors consider these job losses to be short term or long term ad this is dependant on whether they are confined to the restaurant and leisure sector whether there are deep losses across all sectors, a more serious problem.