- Pakistan Rupee (PKR) extends losses for 2nd session
- Covid cases rise raising fears of tighter lockdowns
- US Dollar (USD) rises in risk off trade
- Fed Powell & Janet Yell set to testify before Congress
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is extending gains for a second straight session on Tuesday. The pair gained +0.03% on Monday, settling at 155.70. At 10:50 UTC, USD/PKR trades +0.2% at 155.05.
Risk off sentiment is dominating trading. Rising covid cases coupled with souring US, EU – China relations mean investors are selling out of riskier assets and currencies such as the Rupee and instead are buying into safe havens such as the US Dollar.
The UK, EU and US placing a fresh round of sanctions on China over human rights abuses in Xinjiang. This the first coordinated Western action against Beijing under President Biden. Beijing hit back with punitive measures in tit for tat moves.
Covid cases continue to rise which is adding to the downbeat mood. Tighter lockdown restrictions ultimately mean a longer road to economic recovery.
The US Dollar is trading higher across the board. The US Dollar Index which measures the greenback versus a basket of 6 majors, trades +0.4% at 92.14 at the time of writing.
The US Dollar is rising as investors seek out its safe haven status.
Attention will now turn to Federal Reserve Chair Jerome Powell and US treasury secretary Janet Yellen as they testify before Congress. This will be their first joint appearance in Congress.
The pair begin a two-day session where they are expected to discuss the health of the US economy and the economic policy response to the covid crisis. The hearing comes just weeks after the approval of President Biden’s $1.9 trillion stimulus package and as the Democrats mull over additional stimulus.
In light of the stimulus package and given the recent turmoil in the bond market, which sent US treasury yields sharply higher, questions on the outlook of inflation are almost certain.