- Pakistan Rupee (PKR) surged on Pfizer vaccine announcement
- Rupee is the third best performing currency in Asia +3% since October
- US Dollar (USD) steadies after strong safe haven outflows
- US covid cases over 100k for 6th day
The US Dollar Pakistani Rupee (USD/PKR) exchange rate is advancing on Tuesday paring some of Monday’s losses. The pair settled in the previous session -0.45% lower at 158.28 at the low of the day. At 10:15 UTC, USD/PKR trades +0.17% at 158.55.
The Rupee became the third best performing currency in Asia after hitting an 8 month high against the US Dollar on the interbank market on Monday. The strength of the Rupee could help to tackle high inflation levels in Pakistan and could also help ease the pressure of external debt. The Rupee has appreciated over 3% versus the greenback since the beginning of October.
Today the Rupee is marginally lower amid rising oil prices. West Texas Intermediate surged over 6% in the previous session and is trading just shy of 1% higher again today as $40.65 per barrel as investors continue to cheer the prospect of an improved demand outlook with a covid vaccine in place.
The US Dollar dropped sharply across the board in the previous session as it fell victim to a risk rally. An announcement by drag giant Pfizer that its vaccine candidate developed together with BioNTech was 90% effective sent risk sentiment surging. Investors sold out of the safe haven US Dollar and brought into riskier assets and currencies such as the Pakistani Rupee. The S&P 500 and the Dow Jones surged to record highs reflecting surging risk appetite.
Today the mood has calmed from yesterday’s euphoria, there are still many questions surrounding the durability of the vaccine and distribution. However there appears to be light at the end of the covid tunnel. With the US recording over 100,000 covid cases a day for the 6th straight day and 59,000 patients in hospital with covid the US will likely struggle through a difficult winter before the vaccine is widely available.