- Pakistan closed for 2nd day of Eid al-Fitr celebrations
- Lockdown could be re-imposed if cases escalate post festivities
- US Dollar (USD) under pressure amid rising risk sentiment
- At 10:00 UTC, USD/PKR is trading at 161.20 >> Real time exchange rate
The Pakistan Rupee is trading flat on Tuesday, after weakening for the past three sessions. The Pakistani Rupee settled on Monday -0.3% at 161.20.
Today, Pakistan remains closed in observance of the second day of Eid ul-Fitr.
Whilst the coronavirus lockdown in Pakistan has been eased for the Eid festivities, Special Assistant to the Prime Minister on Health Dr Zafar Mirza fears that the number of covid-19 cases could increase owing to the celebrations. Dr Mirza said that lockdown could be re-imposed should cases escalate, bringing the Pakistan economy to a standstill once gain.
The Pakistan economy is expected to contract -1.6% in the current fiscal year owing to the coronavirus crisis. The unemployment rate is expected to increase to 14.7% this fiscal year, up from 10.8% last year.
As coronavirus damage to the Pakistan economy becomes increasingly apparent, the government is turning to China for belt and road economic boost. Pakistan Prime Minister Imran Khan is keen to generate jobs and plans such as a dam, airport and motorway are being finalised in the China – Pakistan Economic Corridor ahead of a visit by Chinese President Xi Jinping later in the year.
The US Dollar is trading broadly lower across the board amid an improvement in risk sentiment. Novavax, an American biotechnology firm has announced hat it is starting Phase 1 clinical trials on humans. The news comes after Moderna announced encouraging vaccine trial results last week.
As hopes of a vaccine grow and as economies across the globe ease lockdown measures demand for safe havens, such as the US Dollar have declined, whilst riskier assets are once again in favour.
Investors will now look ahead to the release of US consumer confidence data. Analysts are expecting a pick up in consumer morale in May to 88, up from 86.9 as states gradually reopen their economies.