- Pakistan Rupee (PKR) falls as covid cases rise
- Global confidence rises
- US Dollar (USD) trades higher versus peers, but remains below 91.00
- US looks to FOMC tomorrow
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is extending gains on Tuesday for a fifth straight session. The pair settled 0.2% higher on Monday at 153.92. At 11:00 UTC, USD/PKR trades +0.75% at 155.07.
Covid cases continue to rise in Pakistan, hitting demand for the Rupee. Oxygen production has been stepped up to support the health system.
Separately, according to a new Global Economic Conditions Survey (GECS) for 2021 by the ACCA, and IMA, global confidence has jumped by the largest clip since the survey began. Confidence rose sharply in South Asia, including Pakistan, with only the US recording a larger increase. Optimism surrounding the introduction of covid vaccines has helped. Activity indicators have improved in the first three months of the year, although with the recent resurgence of covid, this could ease heading into Q2.
Oil prices are on the rise, although gains will be capped by surging covid cases in India, the third largest importer of oil. West Texas Intermediate trades +0.7% ahead of tomorrow’s OPEC meeting.
The US Dollar is rising across the board on Tuesday The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.16% at the time of writing at 90.95. Despite the rise, it continues to trade around a two-month low.
With a light US economic calendar today, attention is firmly on tomorrow’s Federal Reserve monetary policy announcement and press conference.
The Fed are not expected to move on policy keeping the asset purchase programme unchanged and interest rates at historically low levels.
However, the economic recovery in the US is looking increasingly more convincing. Therefore, Federal Reserve Chair Jerome Powell could face intense questioning over the timing of the Fed’s next move.
US PMI data on Friday was impressive and the US labour market recovery is broadly on track. However, the US central bank has also been clear that they want to see the economy in a better position before easing back the support. With this in mind June’s FOMC meeting could well be more significant.