- Rupee eases from Friday’s 2 month high of 156.20
- Pakistan economy reopens as COVID-19 cases jump to 27,474
- Trump encourages Americans back to work
- USD/PKR is trading +0.4% at 159.95 at 10:15 UTC. Real time exchange rates
After hitting an almost 2 month high at the end of the last week, the Pakistani Rupee is softening versus the US Dollar at the start of the new week. The Pakistani Rupee touched 156.20 on Friday, a level last seen mid-March as the broad mood in the market continued to improve.
At 10:15 UTC, USD/PKR is trading +0.4% higher at 159.95. This is the mid-way between the daily traded range of 159.12 – 160.40 as the Pakistan nationwide lockdown is eased.
The Pakistani Rupee has been strengthening over recent weeks as risk sentiment in global financial markets has started to pick up. As investors turn their attention to the easing of lockdown measures and the reopening of global economies, investors’ risk appetite has improved, boosting demand for riskier assets and currencies.
Concerns over the health of the domestic economy will continue to cap demand for the Rupee. As will fears that the reopening of the Pakistan economy could result in a much worse second wave of infections.
The first phase of easing lockdown began on Saturday, after a month-long lock down and despite the number of coronavirus cases rising to 27,474. Infections experienced the biggest single day jump of 1,637, whilst deaths also increased by 24. Prime Minister Imran Khan said at the end of last week that various businesses would be allowed to reopen, citing the economic crisis from the shutdown measures.
After a weaker start, the US Dollar is trending higher across the board on Monday and US stocks are now pointing to a slightly softer start, a sign that risk sentiment is starting to flag. Whilst the reopening of economies across the globe had dented demand for the safe haven US Dollar, the mood is starting to turn slightly.
Whilst President Trump is encouraging Americans to return to work, the markets are much more cautious amid fears of a second wave of infections. Whilst there is no high impacting US economic data investors will remain focused on coronavirus statistics.
Looking ahead US inflation, Federal Reserve Jerome Powell’s testimony and initial jobless claims will be in focus.