- As COVID-19 cases increase in Pakistan, a second nationwide lockdown could be coming
- Pakistani Rupee (PKR) drops owing to economic impact of a second lockdown
- US Dollar (USD) looks ahead to GDP, Durable Goods & Jobless claims data
- At 10:15 UTC, USD/PKR is trading +0.7% at 161.70 >> Real time exchange rate
After strengthening over the past two sessions, the Pakistani Rupee is weakening versus the US Dollar today. The Rupee settled on Wednesday +0.2% higher at 161.57.
At 10:15 UTC, USD/PKR is trading +0.7% at 161.70. This is at the upper end of the daily traded range of 161.45 – 161.80 as investors weigh up the possibilities of Pakistan re-imposing lockdown.
The Pakistan government is considering putting the country back under lockdown if the coronavirus situations continues to deteriorate.
Officially the number of coronavirus cases in Pakistan has surpassed 60,000. In the past 24 hours 2,400 people have been infected. So far 1,200 people have died from coronavirus. However, fears are that the picture is actually much worse than what is being recorded.
The government remains deeply divided over whether imposing another nationwide lockdown would be beneficial. Ministers are also pushing hard for the reopening of businesses. There are also questions over whether the public will follow another lockdown with zero or no enforcement strategy.
The first lockdown, as with countries across the globe, brought the Pakistan economy to a standstill. A second lockdown would be just as damaging. However, with the number of cases rising and hospitals reaching capacity quickly, there are growing concerns that a second lockdown could be the only option.
The US Dollar was trading broadly lower versus its peers as risk sentiment surrounding the reopening of economies after coronavirus lockdown was overshadowing the escalating tensions between US and China over Hong Kong.
Looking ahead, investors will focus on a barrage of US data for further clues as to the impact of the covid-19 crisis on the US economy. The most closely watched releases will be US Q1 GDP, Durable goods and Jobless claims. Expectations are grim.
Analysts are forecasting economic growth in the first three months of the year will be confirmed at -4.8% contraction on an annual basis. Durable goods are expected to reveal a record double digit decline and initial jobless claims are expected to remain worryingly over 2 million.
