- Pakistan Rupee (PKR) edges lower despite exports recovering
- Imports remain depressed -4.2% year on year
- US Dollar (USD) trades lower versus its major peers as Congress fails to agree a new rescue package
- Recent data has been supportive after manufacturing recovery gains momentum
The US Dollar Pakistani Rupee (USD/PKR) exchange rate is pushing higher on Tuesday. The pair settled in the previous session -0.27% at 167.17. At 09:15 UTC, USD/PKR trades +0.6% at 168.15.
The pair continues to trade within the familiar range of 165.8 – 168.2; a range which has held since mid-June.
The Rupee is edging southwards despite data showing that Pakistan exports finally increased in July. After a series of monthly declines, Pakistan exports jumped 5.8% growth compared to the same period last year.
According to the Ministry of Commerce Pakistan’s exports totalled $1.99 billion compared to $1.88 billion in July last year. This is an indication that the economy could be turning a corner, despite some localised lockdowns still in place.
Imports declined -4.2% at $3,540 million in July, down from $3,696 million in July 2019. This is a sign that domestic demand has yet to pick up from the coronavirus hit.
Whilst the US Dollar rebounded versus its major peers on Monday, the rally showed signs of running out of steam on Tuesday as investors considered encouraging US data and slow progress by Congress towards agreeing a new US rescue package.
Stalling Democrats and Republicans are dragging on the greenback. The two sides claim to have made some progress towards agreeing a new rescue package. However, unemployment benefits remain a sticking point for talks. Congress is due to break for the Summer recess on Friday. This means that the clock is ticking for an agreement this week.
Whilst the impasse in Congress is weighing on the US Dollar recent data has been supportive. US ISM manufacturing PMI revealed that manufacturing activity jumped to its highest level in almost 18 months in July. Orders increased despite rising covid cases. The data helped calm fears that the US economic recovery is being undermined by surging coronavirus cases in the sunbelt.