- Pakistan Rupee (PKR) traces domestic equities lower
- Political uncertainty post senate election drags on sentiment
- US Dollar (USD) rises as bond yields rise
- Fed Powell to speak later
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is pushing higher on Thursday snapping two straight days of losses. The pair settled -0.4% lower at 157.00 on Friday. At 11:15 UTC, USD/PKR trades +0.1% at 157.17.
The Pakistan Rupee is tracing domestic equities lower amid political uncertainty. The Pakistan stock exchange tumbled over 1000 points in early trade following dramatic developments in the senate elections. The surprise victory by the PDM candidate over the ruling PTI candidate Dr Sheikh came as a shock. The Prime Minister Imran Khan has taken the decision to seek a vote of no confidence from the House. The political uncertainty is dragging on demand for Pakistan assets.
Elsewhere oil prices are climbing higher ahead of the OPEC meeting later today. West Texas Intermediate rallied 2.5% in the previous session and is trading an additional 0.8% higher today. According to reports, OPEC+ may roll over production cut into April. They had previously been expected to ease cuts to release more oil back into the markets.
The US Dollar is moving higher across the board. The US Dollar Index which measures the greenback versus its major peers trades 0.2% higher at the time of writing.
Rising US bond yields have boosted the US Dollar. A spectacular ISM services PMI reading of 60.8 (versus 58.8 expected) completely overshadowed weakness in the US jobs market boosting inflation expectations and sparking a selloff in bonds. US ADP payroll data massively missed expectations with just 117,000 jobs added.
Attention will now turn to Federal Reserve Chair Jerome Powell who is due to speak at 17:00 UTC. Investors will be watching closely to see whether Powell is becoming uncomfortable with the pace that yields are rising. In which case bets on the Fed intervening could rise and drag on the US Dollar.
Prior to Powell’s performance US jobless claims will be in focus. Expectations are for 750,000 initial jobless claims, this is up from 730,000 the previous week.