- The Pakistani Rupee is hovering close to all-time lows after militants attacked the Pakistani Stock Exchange
- More foreign inflow expected after 30th June which could help support the Rupee
- US Dollar trading lower versus major peers amid see sawing risk sentiment as covid-19 cases in US surge higher
- US Dollar Pakistani Rupee exchange rate trades +0.3% a 167.6 at 09:00 UTC.
The Rupee is extending losses from the previous week, where it gave up 0.5% in value to settle on Friday at 166.8. Today, the Rupee dived southwards towards its all-time low, striking 168.3, before recovering slightly.
The Rupee weakened in early trade after four militants stormed the Karachi Exchange killing at least two, whilst injuring others. Militants from the Baloch Liberation Army say that they wee behind the attack.
As the situation came under control the Rupee picked up off session lows, although remains in negative territory. The stock exchange also recovered and was trading 0.4% higher at 09:00 UTC.
The Rupee has been under pressure across the past 7 weeks, weakening from 159.7 in mid-May to today’s level of 167.6. Coronavirus cases continue to rise sharply after the country removed lockdown measures. The World Health Organisation has urged Pakistan to return to intermittent lockdown in order to stem the spread of the virus.
The US Dollar is trading lower versus its major peers as sentiments sways. On the one hand, the number of cases in the US is rising, threatening to knock the economic recovery of course. The Governor of California has ordered the closure of bars across 7 counties and advised similar action across 8 others as the number of covid-19 cases continue to climb. This is weighing on risk sentiment.
On the other hand, Chinese factory profits increased for the first time in 6 months suggesting that the economic recovery there is gaining traction. Additionally, vaccine developments in China are also supporting sentiment, after a vaccine has been approved for military use.
This week is an important week for US data with high impacting ISM manufacturing and non-manufacturing data and non-farm payroll numbers all due.