- Pakistan Rupee (PKR) rises as risk appetite surges
- Domestic equities jump 1%
- US Dollar (USD) declines on risk out flows as stimulus bets increase
- US jobless claims in focus
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is dropping lower on Thursday, snapping a three day winning streak. The pair settled +0.2% on Wednesday at 160.48. At 10:15 UTC, USD/PKR trades -0.3% at 159.97 at the low of the day.
Vaccine optimism, US stimulus hopes and Brexit progress are all contributing to an upbeat mood in the global financial markets. Rising risk sentiment is boosting demand for riskier assets and currencies such as emerging market stocks and the Pakistan Rupee.
The Rupee is tracing the domestic stock market higher. The Karachi benchmark index trades almost 1% higher.
Vaccine rollout optimism is a key driver of risk appetite, even as covid deaths in the US near 4000 a day and as Germany struggles to contain the second wave. Authorities in Europe are reportedly expediting the rollout of the covid vaccine before Christmas. In Pakistan the covid vaccine will be available in February or March according to Special Assistant to the Prime Minister on National Health Services Dr Faisal Sultan.
The upbeat mood in the market overshadowed disappointing data which revealed that Pakistan foreign direct investment turned negative by $16 million in November, after two years of impressive gains. The dip lower came as power and telecom firms operating in Pakistan transferred funds to their parent companies in China and Norway respectively.
Meanwhile the US Dollar was trending southwards across the board. The US Dollar index slumped to fresh multi year lows.
US Democrat and Republican lawmakers still haven’t reached an agreement over fiscal stimulus but senior party members sounded more positive than they have done in months. Hopes are growing that a deal will be reached before the Christmas break on Friday.
The Federal Reserve kept interest rates on hold and remained committed to supporting the US economy.