- Pakistan Rupee (PKR) under pressure as inflation eases to 5.7% from 8%
- Covid vaccination programme starts in Pakistan tomorrow
- US Dollar (USD) starting to pick up after weaker start
- Attention on the US $1.9 trillion stimulus package
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is advancing on Tuesday, paring losses from the previous session. The pair settled -0.2% lower on Monday at 160.00. At 09:45 UTC, USD/PKR trades +0.3% at 160.55.
Headline inflation in Pakistan printed at 5.7% year on year in January, its lowest level since June 2018 and down from 8% in the previous month according to the Pakistan Bureau of Statistics. Consumer prices were down -0.2% month on month.
According to the Bureau a decline in the price of vegetables, chicken and eggs helped bring inflation lower. Meanwhile the Urban consumer price index decreased -0.16% whilst rural CPI recorded a drop-0.3%.
The average inflation rate from July – January was recorded at 8.2% and food inflation at 13.7% compared to a year earlier.
Separately Pakistan’s covid vaccine drive will begin tomorrow February 3rd. The first phase of the vaccine programme will see 300,000 health workers receive the jab over the next three weeks. This will be followed by the elderly over 65 years of age.
The US Dollar is pushing higher versus the Pakistan Rupee, it is also pushing higher versus its major peers. The US Dollar Index trades +0.1% breaching 91.00 after slipping lower in early trade.
The US Dollar started the session on the back foot amid a risk on mood in the market. Risk sentiment rose late on Monday after the Democrats filed a $1.9 trillion budget measure in an attempt to bypass Republicans who have voiced opposition to Joe Biden’s massive stimulus plan.
A calmer tone in the equities market was also helping the market mood as the recent retail traders versus hedge fund movement showed signs of slowing.
There is no high impacting US economic data due today, so sentiment is expected to drive the greenback. Looking ahead US data releases start picking up tomorrow ahead of the US non-farm payroll on Friday.