- Pakistan Rupee (PKR) trades around a 6-month low
- LSM expanded 4.8% in Q1
- US Dollar (USD) declines versus major peers as covid cases surge
- US consumer confidence up next
The US Dollar Pakistani Rupee (USD/PKR) exchange rate is pushing higher after settling flat in the previous session. The pair settled on Thursday at 157.37, the low of the day and a fresh 6 month low. At 10:15 UTC, USD/PKR trades +0.4 at 158.00%. The pair is on track to book losses of 1.25% across the week, its 7th straight week of losses.
Large scale manufacturing (LSM) grew 4.8% in the first quarter of the current year. According to the Pakistan Bureau of Statistics (PBS) the expansion was owing to increased output in food, textiles and minerals.
4.8% growth in the July – September period is better than the government was expecting offering some hope surrounding the economic revival in Pakistan. However, with a second wave of covid sweeping across the country it is doubtful whether this level of growth momentum will be able to continue. Across the current fiscal year, the government expects LSM to contract by 2.5%.
The US Dollar is advancing versus the Rupee on Friday; however it is losing ground versus its major peers. The US Dollar Index, which measures the US Dollar versus 6 major peers, trades -0.2%, extending losses from the previous session as covid remains very much the focus.
In the US covid cases have surged to 150,000 new daily infections. Hospitalisations are at 67,000. Investors are fretting that the areas of the US will tighten lockdown restrictions in a bid to control the spread of the virus.
The tighter lockdown restrictions would come as talks between the Democrats and Republicans for additional fiscal stimulus have stalled, leaving the US economy is a precarious position.
Even with the prospects of a vaccine, in the short term the risks remain heavily tilted to the downside. Attention will now turn to the US consumer confidence data due later today.