- Pakistan Rupee (PKR) supported by strong foreign currency reserves and higher amounts sent back to Pakistan by expatriates
- US Dollar (USD) trades lower versus major peers as risk sentiment jumps on vaccine hopes and ahead of earning season
- US sees 60,000 new covid cases a day
- US Dollar Pakistan Rupee (USD/PKR) exchange rate holds steady
The US Dollar Pakistani Rupee (USD/PKR) exchange rate slipped -0.2% across the previous week, settling on Friday at 167.20. At 09:15 UTC, USD/PKR trades more or less flat at 167.25.
The Rupee is well supported at the start of the new week as market participants believe that the State Bank of Pakistan has sufficient foreign currency reserves to meet its import bill and international debt servicing obligations. To the week ending 3rd July, the State Bank of Pakistan’s foreign currency reserves stood at $12,042 billion which is equivalent or 2.8 months of import cover, owing to a $1 billion loan from China on 30th June.
The Rupee gained across the previous week after money sent home by expatriate Pakistani’s rose 2.7% to $20.654 billion in 11 months (July – May) of the current fiscal year.
The US Dollar is trending southwards versus its major peers as the mood in the market improves on vaccine news flow and ahead of the start of US earning season.
A study revealed that Remdesivir, the drug produced by Gilead, reduces the risk of death in severely sick coronavirus patients by 62% when compared with standard care alone. Adding to the good news, Pfizer and BioNTech announced that the vaccine that they are working on together could be ready for FDA approval by the end of this year.
A vaccine is the only sure way to return to pre coronavirus levels of economic growth, so any positive vaccine developments boost risk sentiment, dragging on the safe haven US Dollar.
Investors are also looking ahead with cautious optimism towards the start of US earning season. Big names such as JP Morgan, Goldman Sachs and Johnson & Johnson will provide further clues as to the impact of the coronavirus crisis and the outlook.
Optimism is overshadowing rising covid-19 numbers as the US continues to see new daily cases above 60,000.