- Pakistan Rupee (PKR) declines, car sales increase YoY
- WTI surges after GS predicts recovery in demand
- US Dollar (USD) eases back versus major peers after strong gains
- Strong treasury yields have lifted USD in recent sessions
The US Dollar Pakistan (USD/PKR) exchange rate is trading higher on Tuesday, extending gains for a third straight session. The pair settled +0.06% higher in the previous session at 160.00. At 11:15 UTC, USD/PKR trades +0.15% at 160.50.
Car sales declined month on month in December. However, across the year care sales jumped 15% with 13,870 units sold in December 2020 compared to the same month in 2019. The demand for cars is expected to continue growing owing to low interest rates and the revival of economic activity.
Oil prices are heading higher adding pressure to the Rupee. West Texas Intermediate trades over up over 1% at $52.50 after having risen for 6 of the past 7 sessions. Investment bank Goldman Sachs yesterday released a bullish note of oil saying it expected a solid recovery in demand by mid-2021 owing to the covid vaccine rollout.
The US Dollar has been advancing across the board over the past few session. Today, whilst the US Dollar trades higher versus the Pakistani Rupee, it is trading lower versus its major peers. The US Dollar Index which gauges the greenback against its major peers is trading -0.1% at the time of writing.
Despite today’s softer tone to the USD, the greenback has seen strong buying demand over the last few days amid expectations of massive fiscal stimulus from Joe Biden given the Democrat control of both the lower and upper house. This could mean that the Federal Reserve will soon start tapering its bond buying programme, lifting US treasury bond yields.
US President elect Biden has pledged trillions of dollars in additional covid stimulus. As a result, the US treasury yield has pushed above 1% for the first time since March.
There is no high impacting US economic data today. Attention will turn towards US inflation data which is due to be released tomorrow.