- Pakistan Rupee (PKR) pares gains from the previous session
- Pakistan government borrowed $24 billion to repay debts & service debts
- US Dollar rises as election uncertainty increases post-debate
- US GDP & ADP payrolls in focus
US Dollar Pakistani Rupee (USD/PKR) exchange rate is advancing on Wednesday paring losses from the previous session. The pair settled -0.64% lower on Tuesday at 164.84. At 09:15 UTC, USD/PKR trades +0.4% at 165.55
The Ministry of Finance reported that the government borrowed $24 billion for repayment of debt and debt servicing for previous loans. The current government is making loan repayments of $10 billion per year compared to $5.5 billion of previous governments. After inheriting such large debt piles, high levels of servicing had forced the Pakistani government to take more loans, in a continuing downward spiral.
The US Dollar is pushing higher across the board following the chaotic Trump – Biden Presidential debate. In what turned out to be an insult hurling match, neither Trump nor Biden came out as a clear winner. Biden went into the debate in the lead. Trump’s performance won’t have done much to change that.
The debate brought little clarity to the Presidential race, rather increasing uncertainty surrounding it after Trump refused to say whether he would accept the result. Risk off trading following the debate has seen the US Dollar rise on safe haven flows.
There is plenty of US data to move the US Dollar later today. The final reading of US GDP for Q2 is expected to confirm a -31.7% annualised decline. US ADP private payroll figures will also be in focus ahead of Friday’s non-farm payroll. Analysts forecast that 648,000 new jobs were created in the private sector in September, up from 428,000 in August. The ADP report is closely correlated to the non-farm payroll report, the most closely watched data point across the month.