- Pakistan Rupee (PKR) slips on risk off trading amid covid new strain fears
- Pakistan current account records surplus
- US Dollar (USD) rises across the board
- US Q3 GDP in focus
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is advancing on Tuesday after a flat finish in the previous session. The pair settled on Monday below the key 160.00, flat at 159.70. At 09:15 UTC, USD/PKR trades +0.6% at 160.65 at the high of the day.
Risk off is once again dominating flows in the FX markets as concerns remain over the new covid strain that is spreading across the UK. As a result of the risk off mood, investors are selling out of the riskier Pakistan Rupee whilst buying into the safe haven US Dollar.
On the data front, according to the State Bank of Pakistan, Pakistan’s current account surplus increased to $447 million in November against a $326 million deficit in the same month last year.
The central bank’s latest figures reveal that Pakistan recorded a surplus of $1,640 million in the July – November period against at $1,745 million deficit the same period a year earlier. In sharp contrast to the previous 5-year Pakistan’s current account has been in surplus throughout FY21, thanks to an improved trade balance and surging remittances.
In November both imports and exports picked up reflecting recovery in foreign and domestic demand.
As a result of the improved financial inflows and current account position, the State Bank of Pakistan’s Foreign exchange reserves have increased by around $1 billion in November, the central bank confirmed.
The US Dollar is pushing higher across the board as fears over the new more infectious covid strain overshadow news that US Congress has finally agreed to a huge spending bill. This includes $900 billion for a covid rescue package and $1.4 trillion for government spending.
Looking ahead investors will focus on the release of the US third quarter GDP reading. Analysts are expecting 33% annualized growth.