- Pakistan Rupee (PKR) under pressure as covid cases soar
- Oil price drops ahead of OPEC meeting
- US Dollar (USD) trades at 2.5 year low versus major peers
- US Fed expected to ease policy in December
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is edging mildly higher at the start of the new week, adding to gains of across the previous week. The pair settled on Friday at 159.00. At 11:15 UTC, USD/PKR trades +0.1% at 159.40.
A second wave of covid is sweeping through Pakistan. According to the World Health Organisation, the number of covid lab tests coming back positive hit 24.8% in some states. Pakistan’s overall positivity rate hit 8.53%. The WHO recommends that the positivity rate should be below 5% before a country begins to reopen its economy. Tighter lockdown restrictions in some cities could slow the fragile economic recovery.
Oil prices are on the decline as the OPEC+ meeting falls under the spotlight. West Texas Intermediate trades -1% as concerns growth that the OPEC+ group will fail to agree overextending production cuts in the new year. Failure to do so will see the previously agreed 2 million barrels per day increase come into effect in January.
The US Dollar is advancing versus the Pakistan Rupee; however it is trending lower in early versus its major peers as vaccine optimism and expectations of a dovish Federal Reserve weigh on the greenback. The US Dollar Index, which measures the US dollar against 6 major peers trades -0.1% at the time of writing, after having fallen to its lowest level in two and a half years.
Coronavirus cases continue to surge across America, hospitalisations have reached a fresh record high. However, encouraging vaccine development news throughout November have kept demand for the safe haven week. Instead investors have been buying into riskier assets and currencies despite resurging covid numbers and fresh lock downs in Europe and the US.
US data has been a mixed bag. Whilst manufacturing and services have shown resilience, the labour market recovery appears to be stalling. Whilst Congress remains deadlocked over additional fiscal stimulus, the Federal Reserve are increasingly expected to ease monetary policy further in December. This is also dragging on the greenback.