- Pakistani Rupee (PKR) resumes gains
- ADB gives $2 million grant for Covid Emergency Response
- US Dollar (USD) trades lower versus major peers ahead of Presidential Elections
- A Biden win & a blue wave could drag the USD lower
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is resuming its move lower on Tuesday. The pair settled mildly higher +0.06% on Monday at 160.10 snapping a three-day losing streak. At 10:15 UTC, USD/PKR trades -0.1% at 159.90.
Pakistan and the Asian Development Bank (ADB) on Tuesday signed a $2 million grant agreement for a Covid Emergency Response. The money will be used to build the capacity of frontline health workers in the fight against covid as a second wave spreads across the country.
In September, the ADB forecast a broad economic recovery for Pakistan in FY21, with GDP growth expected in the region of 2%.
The US Dollar is trading higher versus the Rupee, although it is moving lower versus its major peers as investors look ahead to the US Presidential elections today.
US Dollar has been on the front foot versus major peers in recent weeks as covid fears and political jitters meant investors bought into the US Dollar’s safe haven properties. With more counties, particularly in Europe, going back into lockdown, fears were rising that the economic recovery will be derailed.
Today the focus is firmly on the election which is still shaping up to be a tight race. Joe Biden has been leading in the national polls by a comfortable 7 points for some weeks now. The race is much tighter in some key swing states and these are the states which will decide the election.
Should Joe Biden win Presidency, a blue wave, which includes control of the Senate is needed for the markets to believe a big fiscal stimulus package is coming. This would be very US Dollar negative.
Meanwhile, a Republican controlled senate points to ongoing gridlock in the senate. Investors will need to scale back stimulus expectations which could see the safe haven US Dollar rise.