- Pakistan suffering second locust plague in a year, could be a larger threat than coronavirus
- Covid-19 cases continue to climb
- US Dollar trades lower versus major peers as economic recovery optimism overshadows second wave fears
- US Dollar Pakistani Rupee exchange rate (USD/PKR) reaches fresh two month high
The Pakistani Rupee continues to trend lower versus the US Dollar at the start of the week. The Rupee has lost ground over the past 5 weeks, settling on Friday at 165.12.
At 09:15 UTC, USD/PKR is trading +1% at 166.75. This is at the top end of the daily traded range of 166.07 – 167.2 a fresh two month high as coronavirus and a locust invasion drag on demand.
Pakistan is suffering the second largest locust attack in a year, which has so far destroyed crops over millions of acres. Wheat, pulses, oilseed, fodder, vegetable and mango crops have all been damaged by the locusts. Sector stakeholders fear that the Pakistan government have not allocated sufficient funds in the recent federal and provincial budgets to address the issue.
The locust attack comes at the same time that Pakistan is attempting to fight the coronavirus outbreak. Although, many believe that they locust attack could be more of a threat than covid-19.
Coronavirus cases have now soared to over 181,088 with the death toll of over 3,500. However, it is feared that the locust plague could create serious food shortages and be economically more devastating for a country where agriculture accounts for 20% of GDP and 65% of the population live and work in agricultural areas.
The US Dollar is moving lower versus its major peers at the start of the week, after advancing across the previous week. The US dollar is heading southwards as risk sentiment rebounds. Investors are selling out of safe haven assets and currencies such as the US Dollar as investors bet on the strength of the economic recovery despite rising infection rates in some US states such as California, Florida, Texas and Arizona.
Looking ahead the US economic calendar is relatively quiet this week with home sales today and durable goods orders to be released later in the week.