- Pakistan Rupee (PKR) declines after 3 consecutive sessions of gains
- C/A posts account surplus of $73 million
- US Dollar (USD) eases versus major peers on rising stimulus optimism
- Vaccine hopes underpin market sentiment
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is pushing higher on Wednesday, snapping a three-day losing streak. The pair settled -0.7% lower at 161.14 in the previous session, at the low of the day and a level last seen in late May. At 09:15 UTC, USD/PKR trades +0.5% at 162.05.
According to data released by the State Bank of Pakistan, Pakistan’s current account posted a surplus for a third straight month in September. The surplus reached $73 million last month, compared to a $278 million deficit a year earlier. Following the release, Prime Minister Imran Khan concluded that Pakistan was moving in the right direction.
According to the Prime Minister, exports grew 29% and remittances jumped 9%. Imports have also picked up in line with a revival in domestic demand.
The current account as a percentage of GDP was 1.2% in the first quarter of the fiscal year, compared to -2.3% in the same period last year.
The US Dollar is trending higher versus the Pakistan Rupee. However, it is trading lower versus its major peers amid rising optimism regarding additional US fiscal stimulus.
The Democrats and the Republicans appear to be moving closer towards a new covid rescue package. This is boosting demand for riskier assets whilst hitting demand for the safe haven US Dollar.
The latest reports indicate that President Trump is prepared to accept a larger bill. As a result, talks will continue past House Speaker Nancy Pelosi’s soft Tuesday deadline.
Adding to the risk on mood in the market was news that AstraZeneca could be restarting its covid vaccine candidate trial in the US in the coming days. The trial was paused globally on safety concerns, although restarted everywhere expect the US a few weeks ago.
The US economic calendar is quiet, leaving sentiment and politics to drive to greenback.