- Rising risk sentiment boosts Pakistani Rupee (PKR) and drags on safe haven US Dollar (USD)
- Upbeat US data lifts sentiment
- US Congress appear near to agreeing a fiscal stimulus deal
- Slew of US data due including manufacturing numbers, jobless claims and personal expenditure
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is trending lower on Thursday, paring gains from the previous session. The pair settled +0.3% higher on Wednesday at 165.40. At 09:15 UTC, USD/PKR trades down -0.2% at 164.95, marginally up from the low of 164.93 a level last seen back in June.
The risk on mood in the market is boosting demand for riskier assets and currencies such as the Pakistan Rupee, whilst simultaneously easing flows towards the safe have US Dollar.
Risk sentiment quickly moved passed the disappointing US Presidential election debate after upbeat US data booted hopes that the US labour market was in a better position than initially feared. ADP payrolls revealed that 749,000 new jobs were created I the private sector in September. This was well ahead of the upwardly revised 481,000 in August, and some 100,000 higher than what analysts had expected.
News that Congress could be closing in on a compromise for an additional US fiscal stimulus package is also boosting risk appetite. US Treasury Secretary Steve Mnuchin said that talks with Democrat House Speaker Nancy Pelosi are making a of progress. Whilst the Democrats put forward a $2.2 trillion rescue package, the Republicans have proposed a $1.6 trillion deal. Optimism is growing that the two sides will agree a deal, potentially this week.
Looking ahead US data will remain in focus and there is plenty of it to keep investors entertained. The most closely watched releases are expected to be US jobless claims, ISM manufacturing PMI and personal income and expenditure.
The data is expected to show that the US economic recovery and the recovery in the labour market are slowing considerably. Whilst expansion is forecast, the rate of this expansion suggests that the US economic recovery is running out of steam. Any disappointing prints could drag on riskl sentiment and boost the US Dollar.