- Pakistan Rupee advances whilst domestic equity market trades flat
- Oil declines after two days of gains
- US Dollar (USD) trades broadly higher following an upbeat Fed
- US jobless claims are now in focus
After rallying in the previous session, the US Dollar Pakistani Rupee is trading lower on Thursday. The pair settled +0.6% at 166.40 on Wednesday. At 09:30 UTC, USD/PKR trades -0.26% at 165.97. This is at the lower end of the daily traded range.
The Rupee is showing strength amid lacklustre moves in the equities market and support by a falling oil price.
Oil prices had been on the rise for the past two days owing to the huge draw in inventories recorded by the American Petroleum Institute and owing to the disruption caused by Hurricane Sally. However, growing concerns over oversupply as some oil installations around the Gulf of Mexico restart production after the hurricane are pulling oil prices lower. Lower oil prices are beneficial for Pakistan a buyer of oil.
The US Dollar rallied in the previous session after the US Federal Reserve indicated that it would keep interest rates on hold until through 2023. The Fed didn’t adjust monetary policy, as expected but disappointed the market by not hinting at any additional stimulus. The Fed is no rush to make any changes to monetary policy through additional easing.
The Fed’s projections were closely monitored with the Fed upwardly revising its GDP for this year to -3.7% contraction, up from -6.5% contraction. The central bank also views the labour market is in a more favourable light with unemployment expected to be at 7.6% by the end of the year, down from 9.3% previously. However, the Fed also downwardly revised its GDP for next year to 4% growth, down from 5% growth.
Attention will now turn to the US jobless claims figures. Analysts are expecting 850,000 Americans to sign up for unemployment benefit a very slow and gradual improvement from last week’s 884,000.