• Pakistan Rupee (PKR) edges lower despite equities jumping
  • Petrol prices are set to rise
  • US Dollar (USD) traces bond yields high
  • Speech by President Biden in focus

The US Dollar Pakistan Rupee (USD/PKR) exchange rate is at the start of the new week paring some losses from last week. The pair shed -1.2% across the previous week closing on Friday at 156.38. At 10:45 UTC, USD/PKR trades +0.3% at 156.85.

The Rupee is heading lower despite a surge in the domestic equity markets. The benchmark Karachi 100 closed +2.2% on Monday after tumbling over 4% across the previous week.

Oil prices are on the rise again this week, after slipping 0.2% lower across last week. Still, this is just a minor blip in an impressive bull run for the price of oil which has jumped 30% since the start of the year. West Texas Intermediate trades +0.6% at $65.68 at the time of writing.

The Oil and Gas Regulatory Authority has recommended an increase of Rs5 per litre in the price of petrol. The final decision, which could impact inflation, will be taken by the finance minister following approval from PM Imran Khan.

The US Dollar is pushing higher across the board. The US Dollar Index which measures the greenback versus a basket of major peers trades +0.1% at 91.80 at the time of writing.

The US Dollar is being boosted by a surge in US treasury yields, as rising inflation expectations remain in focus ahead of the Federal Reserve’s monetary policy announcement on Wednesday.

The benchmark 10-year bond yield spiked to 1.64% in early European trade. This is its highest level since February 2020. It has just eased back slightly to 1.61% at the time of writing.

US producer price index data released on Friday, which reflects wholesale inflation, posted its largest yearly gain in two years. The data paints an upbeat picture for the health of the US economy, even before President Biden’s $1.9 trillion stimulus is added.

There is no high impacting US data due to released today. Investors will look ahead to a speech by President Biden at 17:45 UTC, later today.