The Pakistani Rupee was trading flat versus the US Dollar on Tuesday after slipping lower for the previous two sessions. The Pakistani Rupee settled on Monday -0.3% at 160.50, towards the low of the day.
At 10:15 UTC, USD/PKR is trading -0.03% lower at 160.45. This is at the top end of the daily traded range of 156.20 – 160.63.
The Pakistan Rupee is showing resilience on Tuesday as investors weigh up reports that foreign direct investment in Pakistan alongside falling oil prices.
FDI Jumps 32%
According to the State Bank of Pakistan multinational companies have continued injecting fresh investment into projects in different sectors of the Pakistan economy, despite the coronavirus crisis. The latest SBP report showed that foreign direct investment (FDI) rose 32% in April to $133.2 million compared to $100.8 million the same month last year. This is good news for the Pakistan economy as is starts to ease out of lockdown.
Falling oil prices are also offering some support to the Rupee. Whilst oil surged higher in the previous session, jumping through $30 per barrel, the price of oil is slipping today. Weaker oil prices are beneficial to the Pakistan economy given that 26% of Pakistan imports are oil price driven.
Fed Powell In Focus
US Dollar is trading on the back foot versus its major peers thanks to optimism surrounding a covid-19 vaccine and as investors look ahead to a testimony by Federal Reserve Chairman Jerome Powell later today. His speech has been released in advance and investors are encouraged by the prepared remarks.
Jerome Powell pledges to keep interest rates low until the US returns to full employment. Additionally, his tone in the speech is more optimistic than comments that he made over the weekend.
News that Moderna Inc a US biotechnology firm had encouraging results in covid-19 vaccine trial also helped boost risk sentiment in the market, weighing on the safe haven US Dollar. Moderna reported that early human trials had revealed that the vaccine produces an immune response to covid-19. Developments here will be watched very carefully, especially given that Jerome Powell said at the weekend that a full economic recovery may only be possible with a vaccine.