- Pakistan Rupee (PKR) edges lower
- Automobile sales surge 48% YoY in November as economy picks up
- US Dollar (USD) Index -0.4% on safe haven outflows
- US covid vaccine & stimulus talk progress in focus
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is advancing at the start of the week. The pair settled on Friday at 159.85, its third straight session of declines. At 09:15 UTC, USD/PKR trades +0.1% at 160.12.
Car sales surged 48% in November in Pakistan, as consumers appeared undeterred by the second covid wave. All three major automobile manufacturers reported year on year growth last month.
According to data released by the Pakistan Automotive Manufacturers Association (PAMA) car sales increased to 14,454 units last month, compared to 9,789 units the same month the previous year.
Expectations are for car sales to strengthen owing to low interest rates and a recovery in economic activity.
Separately China has agreed to provide Pakistan a $1.5 billion financing line to repay $2 billion owed to Saudi Arabia. In 2018 Saudi Arabia agreed to give Pakistan $3 billion in foreign currency support for a year and an additional loan of $3 billion for oil imports to stave off a current account crisis.
The US Dollar is edging higher versus the Pakistan Rupee, however it is pushing lower versus its major peers. The US Dollar Index which measures the greenback against 6 major peers trades -0.4% lower at 90.58 close to its 2.5 year low.
The US Dollar is out of favour amid a broad risk on mood in the market. The US covid vaccination programme starts today after the Pfizer and BioNTech vaccine was approved by the US Food and Drug Association late last week.
Adding to the upbeat mood some progress in US stimulus talks appears to have been made over the weekend. According to Reuters the $908 billion relief package on the table could be spit into two in an attempt to win approval and could be introduced later today.
There is no high impacting US data due for release. Risk sentiment is expected to continue driving the greenback.