- Subdued trading owing to Pakistan and US public holidays
- Concerns rising over civil liberty restrictions in Hong Kong
- Risk off amid cooling US – Sino relations weighs on Pakistan Rupee
- At 10:00 UTC, USD/PKR is trading +0.72% at 161.20 >> Real time exchange rates
Risk off trading, in thin volumes is dragging on the Pakistani Rupee versus the US Dollar on Monday, extending gains from the previous week. The Pakistani Rupee declined -0.43% against the greenback last week, closing at 160.05.
At 10:00 UTC, USD/PKR is trading +0.72% at 161.20. This is at the top end of the daily traded range of 160.79 – 161.20 in what is expected to be a quiet session owing to Eid and US Memorial public holidays.
The mood in the market has soured as tensions between the US and China continue to escalate, and amid growing concerns for civil liberties in the ex-British colony and financial hub Hong Kong. The darkening mood in the broader market is dragging on demand for riskier assets and currencies such as the Pakistani Rupee, whilst boosting demand for the safe haven US Dollar.
China formally tabled a new security law for Hong Kong and Macau, aggravating already fragile relations between China and the US. Thousands of protestors took to the streets in Hong Kong.
Chinese foreign secretary Wang Yi warned that the US was pushing relations with China to the brink of a new cold war. His comments come after Senior US officials threatened sanctions on China if the law was enacted.
On Friday, the US Commerce Department added 33 Chinese companies to its blacklist.
There have been long standing frictions between the US and China over trade, human rights and a range of other issues. However, these tensions have reached new heights amid the coronavirus outbreak, as President Trump continues to pin blame for the outbreak on China.
There is no high impacting economic data due to be released from Pakistan or the US today, leaving the currency pair to be driven by sentiment.
Looking ahead, tomorrow sees the release of US consumer confidence data which could provide clues as to how quickly the consumer driven US economy can be expected to recover.