- WTO predicts trade volumes will decline between -13% – -32% this year
- Pakistan exports to be weak if foreign demand fails to pick up
- US Dollar (USD) trades flat torn between reopening optimism and rising covid-19 numbers
- US Dollar Pakistani Rupee exchange rate (USD/PKR) eases from 168.25 reached overnight, an 11-week high
The Pakistani Rupee (PKR) dropped to an almost 3 month low on Wednesday, extending losses from the previous session. The Rupee settled on Tuesday -0.4% lower at 167.40.
At 08:30 UTC, USD/PKR trades +0.03% at 167.45, after having pushed as high as 168.25 a level last seen at the end of March. The Rupee has already shed 1.3% versus the greenback this week, in its sixth consecutive week of declines.
The World Trade Organisation (WTO) reported that the volume of global trade dropped by -3% in the first three months of the year, compared to the same quarter a year earlier.
Global trade is also expected to decline a massive -18.5% year on year in the second quarter as a result of coronavirus, according to the WTO. This will be the steepest plunge on record. Although the trade body also said that it is expected the second quarter to be the nadir.
Across the year as a whole, WTO forecast that global trade will decline by between -13% at best and -32% at worst. The WTO also confirmed that the outlook for global trade is highly uncertain over the coming two years. This is particularly bad news for the Pakistan economy which is so dependent on exports and foreign demand.
US Dollar is treading water versus its major peers as investors weigh up economic recovery optimism with worsening coronavirus statistics. The World Health Organisation, WTO warned that the number of global daily coronavirus cases is accelerating. North and South America are seeing concerningly high daily increases.
Investors are worried that the persistent increase in cases in several states, including Florida, California and Texas could slow the economic recovery. Data yesterday showed that business activity in the US was contracting at a much slower pace, whilst home sales surged 16.6% in May.
There is no high impacting US data today. Investors will look ahead to US jobless claims and durable goods data on Thursday.