- Pakistan Rupee (PKR) traces domestic equities higher
- Surging oil prices caps gains
- US Dollar (USD) struggles for direction on Veterans Day
- Pfizer vaccine news & soring covid cases in focus
The US Dollar Pakistan Rupee (USD/ PKR) exchange rate is ticking mildly lower paring some gains from the previous session. The pair settled +0.14% on Tuesday at 158.50 towards the lower end of the daily traded range. At 11:15 UTC, USD/PKR trades -0.05% at 158.41.
The Rupee is rebounding tracing the domestic equities higher. The benchmark Karachi 100 index is extending gains for a third straight session, although today’s move higher is more muted at just 0.1% as investors continue to cheer vaccine developments despite fears that more restrictions could be applied as second wave fears grow in Pakistan.
Oil is pushing higher, capping gains in the Rupee, with West Texas Intermediate rallying over 3% adding to gains of 10% earlier in the week. Investors are very much upbeat regarding future demand following the Pfizer covid vaccine breakthrough, which is overshadowing near term demand pressures as more of Europe heads into lockdown to control spiralling covid cases.
The US Dollar is struggling for direction versus its major peers, on Veterans Day in the US. The bond market is closed, which is limiting activity in the foreign exchange market considerably. Furthermore, there is no US economic data to drive the USD.
Instead US Dollar investors will continue digesting Pfizer’s vaccine news, as covid-19 cases in the US continue to surge. The US recorded its 7th straight day of new daily covid infections topping 100,000. Meanwhile hospitalisations have risen to almost 62,000 as the third wave shows no signs of slowing down in the US.
Whilst the announcement from Pfizer that their covid-19 vaccine candidate was found to be 90% effective is game changing, this is not an overnight solution. The US will need to survive a challenging few months before the vaccine will become widely available hopefully next spring.