- Pakistan Rupee (PKR) matches all time low reached last month of 168.75
- Business morale in Pakistan slipped further into negative territory
- US Dollar (USD) trades lower versus major peers amid growing concerns over the health of the US labour market
- Initial jobless claims expected to show labour market recovery stalling
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is gaining ground for a third straight session on Thursday. The pair settled +0.1% on Wednesday at 168.25. At 09:00 UTC, USD/PKR trades +0.6% at 168.55, slipping back slightly from the all time high of 168.75 reached earlier in the session.
According to the State Bank of Pakistan’s business confidence index, business morale remains very low and in negative territory on the index. The coronavirus crisis has added to a pessimism that was already engulfing businesses in Pakistan owing to the sluggish economy.
The overall Business Confidence Score in Pakistan printed at -50%, down a further 5% from the previous -45%. The downbeat sentiment is prevalent across all sectors but most notable in the manufacturing and service sectors.
The US Dollar is trending southwards versus its major peers amid growing concerns that the US economic recovery will lag that of other countries, held back by rising coronavirus cases in the states.
Recent US data has been mixed. On the one hand, the manufacturing and service sectors are expanding, with PMI data showing signs of the economic recovery gaining momentum. However, on the other hand, data concerning the US labour market is showing signs of the recovery stumbling.
Yesterday, ADP private payrolls data showed that new job creation in the private sector slowed considerably in July. The employment component of the ISM non-manufacturing PMI also showed that employment declined. However, new orders surged to a record high.
Attention will now turn to the US initial jobless claims. Expectations are for 1.41 million Americans to have signed up for unemployment benefits, this is only down very slightly from last weeks’ 1.43 million. This would be the third week where initial claims have remained at roughly the same level indicating that the labour market recovery is stalling ahead of tomorrow’s closely watched non-farm payroll report.