- Pakistan Rupee (PKR) hovers around levels last seen in May
- Large Scale Manufacturing +3.66% YoY in first 2 months of fiscal year
- US Dollar (USD) trades lower versus major peers on safe haven outflows
- US fiscal stimulus hopes still alive
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is advancing on Friday paring losses from the previous session steep losses in the previous session. The pair settled -0.2% lower on Thursday at 160.89, the lowest close since May. At 09:15 UTC, USD/PKR trades +0.30% at 161.37. The pair is on track to lose 1.1% across the week, its fourth straight week of losses.
According to the Pakistan Bureau of Statistics, large scale manufacturing (LSM) has grown by 3.66% year on year in the first two months of the new fiscal year 2021. The is a significant improvement after year on year declines in production through the peak covid months at the end of the last fiscal year.
Separately the State Bank of Pakistan’s Business Confidence Index is also back in positive territory after remaining negative over the past three reports. Furthermore, PMI data also appear to show that the downturn had bottomed out in August. The data is encouraging. However, with resurging cases in both Pakistan and globally investors remain cautious.
The US Dollar is edging higher versus the Pakistan Rupee; however it is trading mildly lower versus its major peers amid an improving mood in the market. Overnight President Trump & Joe Biden faced each other in the second and final live Presidential election debate. Overall, the debate was more civilised than the first debate. Both candidates even touched on policy. However, there was little market reaction.
Instead investors are keenly focused on US stimulus package developments, which have been slow. Even so, the fact that the two sides are still talking is being interpreted as good news. This is dragging on demand for the safe haven US Dollar. House Speaker Nancy Pelosi confirmed that talks with Steve Mnuchin have progressed, and a deal could be agreed “pretty soon”.
Attention will turn to US PMI service sector and manufacturing numbers due later today.