• Pakistan Rupee (PKR) snaps 2 day winning streak
  • Trade deficit widened 32% in December YoY
  • US Dollar (USD) strengthens across the board on stimulus optimism
  • US NFP to shows slowing pace of gains

The US Dollar Pakistan Rupee (USD/PKR) exchange rate is advancing on Friday, snapping a two day losing streak. The pair settled lower on Thursday -0.2% at 160.25. At 09:45 UTC, USD/PKR trades +0.35% at 160.25. The pair is on track to gain 0.3% across the week.

According to the Pakistan Bureau of Statistics Pakistan’s trade deficit widened by 32% in December compared to the same period the previous year. The deficit widened to $2.683 billion, up from $2.032 billion.  On a monthly basis, the trade deficit increased 25.5% in December from November.

Exports witnessed an 18% increase in December to $2.352 billion, up from $1.988 billion the year before.

Meanwhile, imports registered growth of 25.5% increasing to $5.035 billion in December, up from $4.030 billion in December 2020.

The US Dollar is pushing higher across the board amid growing optimism that a Democratic President and Democrat control over the House of Representative and the Senate will result in a large fiscal stimulus package.

Attention will now turn to the US Labour Department’s closely watched jobs report.

Analysts expect the report to show that the pace of hiring decelerated in December as tighter covid restrictions continued to hit businesses.

Forecasts are for just 71,000 new jobs to have been added in December, down steeply from 245,000 in November. However, the unemployment rate is expected to tick lower to 6.7%. Analysts forecast a 0.2% month on month increase in average hourly earnings.

The lead indicators this week point to a weaker than forecast NFP reading with Challenger Job cuts, initial jobless claims and ISM services PMI employment subcomponent all disappointing.

A weak reading could boost the US Dollar if invrstors believe that it will strengthen the case for additional fiscal stimulus.