Asian currencies including the Pakistani Rupee will have their gains capped to the upside amid fears over China virus. At the foreign exchange market, the USD to PKR exchange rate closed marginally lower at 154.40 compared to the previous weekly closing rate of 154.60. The State Bank of Pakistan (SBP) reported that in the open market Rupee’s value fluctuated between Rs 154.70 and Rs 154.40 respectively.
Looking over the week ahead, the Fed interest rate decision is expected to weigh on the PKR exchange rate. While market participants aren’t expecting any changes in the monetary policy, the Fed’s tone can turn on the dovish side after the US President Donald Trump said he “loves” negative interest rates.
“Even now as the United States is by far the strongest economic power in the world, it’s not even close. … We’re forced to compete with nations that are getting negative rates, something very new. Meaning, they get paid to borrow money, something I could get used to very quickly. Love that.” Trump said in his address at the World Economic Forum WEF in Davos, Switzerland.
This would also be Fed’s first meeting after the phase-one of the US – China trade deal was signed. Fed Chairman Jerome Powell’s take on the signed trade deal will also give traders more clues.
In other news, the total number of deaths in China rose to 81 and sickened hundreds more.
The benchmark equity index Karachi Stock Exchange KSE-100 Index registering a gain of 0.24%, after it settled at 43,167 on Friday, and was seen trading on Monday morning Pakistan trading hours at 42,475 down -0.37%. Year-to-date the Pakistan stock exchange market is up around 4.66%.
The Pakistan 10-year government bond yield was seen quoted at 11.336 versus 11.083 previous closing rates.
On the other hand, the dollar index settled at 97.88 on Friday.
During early Asia trading hours, the USD/PKR exchange rate was seen stabilizing at 154.53.
