- Pakistan Rupee (PKR) treads water after gains across the previous week
- Upbeat Chinese data if boosting the mood in the market
- Rising oil prices cap gains
- US Dollar (USD) trades lower on vaccine optimism
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is trading flat at the start of the new week after losing ground last week. The pair slumped 0.6% across the previous week settling on Friday at 158.00 towards the low of the week. At 10:15 UTC, USD/PKR holds that level of 158.00.
The Rupee holds steady as strong data from Asia was offset by rising oi prices. Chinese factory output beat forecasts rising 6.9% in October compared to a year earlier, ahead of the 6.5% forecast, and in line with September’s output.
Furthermore, China reported a strong pick up in retail sales suggesting that its recovery in consumption is on the right path following the covid pandemic. Any signs of strengthening in the Chinese economy is good news for Pakistan.
Meanwhile surging oil prices are capping any gains in the Rupee. West Texas Intermediate trades over 2% higher on hopes that the OPEC+ group which meets tomorrow. Producers are expected to support further extensions to supply cuts in order to offset the sharp decline in demand owing to covid infections.
The US Dollar is holding steady versus the Rupee; however, it is edging lower versus its major peers in risk on trading. Upbeat data out of Asia in addition to optimism surrounding a covid vaccine is lifting risk appetite sending investors in search of riskier assets and currencies, whilst he safe haven US Dollar falls out of favour.
In addition to data from China, Japan reported 5% quarter on quarter expansion in the economy, ahead of the 4.4% forecast, lifting the world’s third largest economy out of recession.
Vaccine hopes remain elevated after Pfizer last week announced that its vaccine candidate was found to be 90% effective in Phase 3 trials. Moderna, a US based pharmaceutical firm is due to reveal its results this week.