- Pakistani Rupee (PKR) advances as it continues to trade around 5-month highs
- Oil prices drop as covid fears hit demand outlook & Libya increases supply
- US Dollar (USD) rises versus major peers on safe haven flows amid surging covid cases
- US stimulus agreement looks unlikely before elections
The US Dollar Pakistani Rupee (USD/PKR) exchange rate is under pressure on Monday extending losses from the previous week. The pair shed 0.7% across the previous week, closing on Friday at 162.15. At 09:15 UTC, USD/PKR trades -0.6% at 161.15 as the pair continues to hover around levels last seen in late May.
Tumbling oil prices are offering some support to the Rupee. Oil is seen extending losses on Monday falling almost 2% as a surge in covid cases prompts concerns over future crude oil demand. The prospect of increased supply is also dragging on the price as Libya’s National Oil Corp on Friday ended its force majeure on exports from 2 key ports, saying production could hit 1 million barrels per day within 4 weeks.
Elsewhere, it was reported that whilst a huge drop in interest rates had barely lifted overall private sector credit, it has helped boost the automobile industry by boosting debt driven car purchases.
The US Dollar is pushing higher versus major peers on safe haven flows. Record numbers of new daily covid cases in Europe and the US coupled with fresh doubts over a new US stimulus package is fuelling risk off trade and prompting investors to turn to the US Dollar for its safe haven properties.
There are few signs that a US fiscal stimulus package will be agreed before the US Presidential elections next week, with both the House Speak Nancy Pelosi and White House Chief of Staff Mark Meadows accusing each other of moving goal posts. With less than a week to go until the election there is little motivation from either side to push a deal over the line.
There is little in the way of economic data, with just US home sales on the US calendar. This means that sentiment and covid headlines are likely to drive the greenback across the rest of the session.