- Pakistan Rupee (PKR) advances as government forecasts 2% GDP growth
- Economic indicators are positive & remittances higher
- US Dollar (USD) investors look ahead to retail sales data
- US fiscal stimulus looks unlikely before election
The US Dollar Pakistani Rupee (USD/PKR) exchange rate is trending lower on Friday. The pair settled +0.15% higher on Thursday at 162.75. At 09:15 UTC, USD/PKR trades -0.3% at 162.30. The pair is on track for -0.9% losses across the week, adding to 0.5% losses from the previous week.
The Finance Division confirmed that Pakistan’s foreign exchange reserves were stable and not depleting denying reports that stated otherwise. The government division also confirmed that the International Monetary Fund (IMF) programme had not stalled amid rumours and reports earlier in the week that it had.
Separately Minister for Industries Hammad Azhar told the Senate that despite the ongoing covid crisis Pakistan could expect 2% GDP expansion in the current fiscal year. Mr Hammad said that economic indicators are positive, and remittances have experienced a 20% increase compared to a year earlier.
The US Dollar is edging lower versus its major peers as well as the Pakistani Rupee after a strong week of gains in broad risk off trading. The mood in the market has soured owing into rising covid cases and the absence of US fiscal stimulus which is driving investors towards safe havens such as the US Dollar.
A spike in covid cases in Europe and the US has prompted fears of tighter lockdown restrictions which could quickly choke the already vert fragile economic recovery.
The absence of additional US fiscal stimulus is adding to the downbeat mood, particularly as the US economic recovery is showing signs of stalling. US jobless claims increased last week to 899,000 a 7-week high. Still with the US election just over two weeks away it is unlikely that the Republicans and Democrats will reach an agreement until after US goes to the polls.
Attention now will turn to US retail sales. Analysts are expecting sales to increase +0.7% month on month in September.