The US dollar is higher against the Pakistani rupee on Tuesday.
- India travel ‘air bubbles’ will not include Pakistan
- Pakistani rupee bucks the trend, falls against a soft US dollar
- Treasury Secretary Mnuchin comments on US stimulus
USD/PKR was higher by 25 pips (+0.15%) to 168.25 as of 4pm GMT. This week the US dollar is stronger by 0.43% over the Pakistani rupee.
The currency pair had softened to 167.4 but ended up back over the 168 level to finish the day higher. Yesterday it gained +0.45%.
PKR: Pakistan not in India’s travel bubble
On Tuesday Indian civil aviation minister Hardeep Singh Puri said that India is proposing to allow commercial air travel between five neighbouring countries, but Pakistan was left off the list.
Puri tweeted: “Air bubbles have also been proposed with our neighbours Sri Lanka, Bangladesh, Afghanistan, Nepal & Bhutan. Going forward, we will consider such arrangements with other countries also.”
The arrangements under the Vande Bharat Mission (VBM) are for repatriating Indian’s from overseas countries back to India. The new “travel bubbles” would aim to increase cross-border travel and trade to boost the respective countries, which would leave Pakistan at a disadvantage were it not included, weighing on the Pakistani rupee.
USD: Housing starts rise more than expected
Treasury Secretary Steve Mnuchin told CNBC that the US President wants to assist small businesses, which have been disproportionately hurt by the pandemic but make up half of employment in the US. The US dollar remains under pressure while Democrats and Republicans struggle to find common ground on a new stimulus deal, especially since the passing of President Trump executive orders for interim stimulus measures.
The only economic data was on housing. July housing starts were better than expected at 1,496,000 versus 1,245,000 expected, up 22.6% month over month. The pandemic caused what seems now to be a temporary blip in the housing market, which is now on fire with people moving to the suburbs to avoid crowded cities and with more flexibility to work remotely without the city commute, all with super low interest rates.
