- Pakistan Rupee (PKR) declines for a second straight session
- SBP upwardly revised its receipts projection
- US Dollar (USD) declines on safe have outflows
- FOMC minutes due tomorrow
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is advancing on Tuesday, extending gains for a second straight session. The pair settled +0.3% higher at 158.93. At 09:45 UTC, USD/PKR trades +0.8% back over 160.00 at 160.20.
Analysts expect the value of the Rupee to remain well supported this week amid risk on trade and strong remittances.
Data yesterday revealed that Pakistan remittances remained over $2 billion for an eighth straight month. The amount that Pakistanis abroad send back to friends and family in Pakistan hit $2.3 billion in January. The central bank has upwardly revised its projection for receipts to around $24-$25 billion, up from $23-24 billion before.
Oil prices continue trade around a 13-month high. West Texas Intermediate trades just below $60 per barrel amid an improving demand outlook on vaccine rollouts and as a cold front shut some oil refineries in Texas and amid rising tensions in the Middle East.
Whilst the US Dollar is advancing versus the Rupee, it is falling lower versus its major peers. The US Dollar Index, which measures the greenback versus 6 majors trades -0.3% at the time of writing, at a three-week low.
Vaccine optimism continues to drive an upbeat market mood which is dragging on demand for the safe haven US Dollar. As the covid vaccine rollout gathers pace investors are growing more confident of a strong global economic recovery.
Attention is also on the Biden administration’s huge stimulus package which continues to make its way through Congress. The prospect of a $1.9 trillion support package is also weighing on the greenback.
Looking ahead the US economic calendar is quiet today. Tomorrow sees the release of the minutes from the January FOMC meeting. Investors will be scrutinizing the minutes closely for any clues as to the Fed’s next move and when it could start tapering support. US retail sales are also due to be released tomorrow and could provide some fresh direction for the greenback.