- Pakistan Rupee (PKR) strengthens as foreign exchange reserves rise
- Domestic equities head lower
- US Dollar (USD) trades higher versus major peers as GDP data beats
- Federal Reserve reiterate dovish stance
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is extending losses on Thursday for a second consecutive day. The pair settled -0.05% lower on Wednesday at 154.24. At 14:00 UTC, USD/PKR trades -0.45% at 153.55.
The Rupee is strengthening despite a sell off in the domestic equities market. The benchmark Karachi 100 closed -0.44% falling below the key 45,000 level.
Separately, foreign exchange reserves held by the central bank rose 2.3% on a weekly basais according to the most recent data released by the state bank of Pakistan.
Reserves held by the bank rose to $16,427.8 million, up by $384 million. The central bank gave no reason for the increase in reserves.
The US Dollar is falling versus the Rupee. However, it is advancing versus its major peers on Thursday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.08% at the time of writing at 90.68. Despite the rise, it continues to trade around 9 week lows.
The US Dollar came under pressure in the previous session after the US Federal Reserve kept interest rates on hold. The Fed upgraded its outlook for the US economy. However, the Federal Reserve Chair Jerome Powell stuck to his well-rehearsed verse that the Fed would remain supportive. He considered that it was too early to discuss tapering support to the economy.
US GDP data revealed that the US economy is growing at a faster clip than at the end of last year. The US GDP for the first three months came in at 6.4% on an annualized basis, well ahead of the 4.3% recorded in Q4 2020 and also ahead of the 6.1% forecast.
US jobless claims also hit the lowest level since the start of the pandemic. The data suggests that the US economic recovery is well on track.