- Pakistan Rupee (PKR) rises as foreign exchange reserves jump
- Domestic equities edge lower, oil declines 1%
- US Dollar (USD) trades higher versus major peers on rising treasury yields
- US personal income & spending in focus
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is trending lower for a fourth straight day on Friday. The pair settled -0.1% lower at 158.25 in the previous session. At 11:15 UTC, USD/PKR trades -0.3% at 157.8.
Pakistan foreign exchange reserves held by the State Bank of Pakistan rose 0.14% on a weekly basis, according to data released by the central bank.
Foreign currency reserves were recorded at $12,908.7 million, up by $19 million compared to the previous week.
The Rupee despite domestic equities slipping lower on Friday. The benchmark Karachi index closed -0.3% at 45,812.
Oil also traded lower owing to a stronger USD. West Texas Intermediate trades -1% on the day but holds gains of 6% across the week.
The US Dollar is pushing firmly higher across the board. The US Dollar Index which measures the greenback versus 6 major peers trades +0.5% at 90.60 at the time of writing.
The greenback is extending its rebound from a 7 week low thanks to upbeat data and rising inflation expectations.
US fourth quarter GDP was upwardly revised to 4.1% from 4% in the second reading. US durable goods orders also came in ahead of forecasts climbing 3.4% month on month in January.
Adding to the good news US jobless claims made it a hattrick of strong data reports, rising 730,000 last week. This was the lowest weekly rise since November and was significantly less than the 863,000 forecast.
The upbeat data supported expectations that the US could see a solid economic recovery amid the rapid rollout of the covid vaccine and the Biden administration’s $1.9 trillion covid stimulus package. As strong recovery is expected to bring higher inflation and tighter monetary policy from the Fed.
10 year treasury yields surged to a pre-pandemic high of 1.61% before easing back to 1.50% at the end of the day.
The bond markets will remain very much in focus on Friday. Additionally, investors could turn their attention to Personal income and spending data which should provide further clues over the health of the economic recovery.