- Pakistan Rupee (PKR) declines paring 0.6% gains last week
- FDI declines 27.4% July – January period
- US Dollar (USD) pares earlier gains
- Fed Powell to testify before congress tomorrow
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is pushing higher at the start of the week, paring some losses from the previous week. The pair settled -0.6% lower at 158.50 on Friday. At 11:15 UTC, USD/PKR trades +0.1% at 159.00.
According to the Sate Bank of Pakistan’s most recent data, Pakistan received Foreign Direct Investment amounting to $1,145.3 million in July – January of 2021 compared to 41,577 million in the same period of the previous fiscal year. This equates to a decline of $431.7 million or 27.4%.
The data revealed that FDI dropped by -12.2% or $27 million in January to $192.7 million compared to $219.6 million in January 2020.
The vast majority of recent foreign investment was contributed by China which continues to be the largest investor with overall 35% share in overall FDI. Netherlands is the second largest investing country and Hong Kong ranked third.
The US Dollar started the week on the front foot however it is easing back from early gains. The US Dollar Index which measures the greenback versus its major peers now trades flat on the day at 90.30.
The tone towards the safe haven US Dollar is weak as the focus remains on the global economic recovery from the covid pandemic and the ramping up vaccine rollout.
Whilst there is no high impacting US economic data due for release today investors will be looking ahead to Federal Reserve Chair Jerome Powell’s testimony before Congress tomorrow. Fed Powell has the challenging task of sounding upbeat about the recovery whilst keeping expectations for tapering support reined in.
Investors will also be watching for any updates on the progress of the Biden administration’s $1.9 trillion stimulus package through Congress. The bill could be voted on in the House of Representatives as soon as Friday. This could mean that the Senate sees the bill in the following week.