- Pakistan Rupee (PKR) extends gains for 2nd session
- Pakistan Stock Exchange witnessed deep selling KSE 100 index closed -3.15% lower
- US Dollar (USD) trades higher versus major peers on sage haven flows
- US Q3 GDP expected to show record rebound 31%
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is extending losses for a second straight session on Thursday. The pair settled -0.2% lower in the previous session at 160.35, towards the lower end of the daily traded range. At 09:15 UTC, USD/PKR trades -0.1%% at 160.20.
The Rupee is extending gains despite a bloodbath on the Pakistan Stock Exchange which saw the KSE100 benchmark index tank more than 1200 points. The index closed over 3.1% lower as the rise of covid cases in the country unnerves investors and as the National Command and Control Centre (NCOC) made it compulsory for all to wear face masks when leaving their home. It also applied a 10pm curfew to business.
A nationwide covid tally saw 908 new covid cases reported in the last 24 hours, taking the total case load to 331,108.
The US Dollar is trending lower versus the Pakistan Rupee; however, it is pushing higher versus its major peers. The greenback remains well supported thanks to safe haven inflows as covid cases surge and investors fear that the second wave of infections could hamper or even derail the economic recovery in Europe and the US.
Investor attention will now turn towards US GDP data release for the July – September period. The economy is expected to show a record breaking 31% growth on an annualised basis, after contracting a record -31.4% in Q2. However, it is worth noting that this doesn’t mean that the economy is back to where it started as 50% of 100, is significantly larger than 50% of 50.
What this data will prove is that the US is in desperate need of additional fiscal stimulus. However, any new covid rescue package looks unlikely prior to the election given the stalemate in Congress.