- Pakistan Rupee (PKR) rises on strong inflows
- Domestic equities rally 1.7%
- US Dollar (USD) trends lower after dovish Fed
- US GDP, durable goods and jobless claims in focus
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is trending southwards for the third straight day on Thursday. The pair settled -0.14% lower at 158.40 on Wednesday. At 09:15 UTC, USD/PKR trades -0.03% at 158.32.
Rising risk appetite amid the prospect of continued support from the US Federal Reserve is boosting demand for riskier assets and currencies across the globe. Strong inflows of foreign currencies is also offering support as the Islamic Development Bank extended financing of $1.1 billion to Pakistan.
The Rupee is tracing domestic equities higher. Pakistan stocks are heading into the close firmly higher with the benchmark Karachi 30 index trading up 1.8%.
Rising oil prices could limit gains in the Rupee. West Texas Intermediate builds on 2.5% gains from Wednesday and trades +0.3% higher at $63.40.
The US Dollar continues to slide across the board on Thursday. The US Dollar Index which measures the greenback versus 6 major peers trades -0.27% below the key 90.00 level at the time of writing. This is an almost three year low after US Federal Reserve Chair Jerome Powell reiterated the central bank’s easy monetary policy stance was here to stay.
In his semi-annual testimony before Congress Fed Chair Powell reassured that the US central bank won’t be changing its accommodative stance until the US economy is clearly improving. Jerome Powell and his colleagues consider that the US economy still has a long way to go until the central bank’s goals on inflation and employment are met.
The idea of low interest rates for longer and n o signal in the tapering of bond buying regardless of the improving outlook favours demand for riskier currencies at the expense of the safe haven US Dollar.
Today there is plenty of data to keep investors entertained. US durable goods orders, US GDP the second reading for the fourth quarter and the usual weekly jobless claims will be in focus and could move the US Dollar.
