Pakistani rupee extends losses despite SBP intervention
The Pakistani Rupee weakened versus the might US Dollar as trading kicked off for the new week. The Pakistani Rupee was extending losses from across the month; a month which has seen the Rupee shed over 8% of its value versus the greenback. Investors are fleeing riskier currencies in favour of the safe haven US Dollar.
At 10:00 UTC, USD/PKR was trading at 166.50, at the upper end of its daily trading range of 165.1 to 167.00. It is trading close to its all-time high of 168.42 reached last week.
After falling to a record low versus the US Dollar last week, the Pakistan central bank reportedly intervened to stop the plunge in the Rupee, the worst performing Asian currency last week. The State Bank of
Pakistan said that it is committed to a market-based exchange rate and will only intervene to address disorderly market conditions.
The news comes as the International Monetary Fund is working on Pakistan's request for an additional $1.4 billion loan. Pakistan is requesting the funds to help address the impact of coronavirus on businesses and the economy.
Investors will now look ahead to consumer confidence data for March. Given that coronavirus outbreak started to spread in Pakistan at the end of February, the data will show the initial impact on the virus on consumer morale. Analysts are expecting consumer sentiment to plunge to 25.8 in March, down from 40.5 in February.
The US Dollar is advancing across the board on Monday as investors seek out its safe haven properties. Over the weekend, President Trump dashed hopes of a rapid return to normality, instead announcing that the stay at home guidance will remain in place until the end of April. The move means that the US economy will be at a standstill for longing, raising the risk of a deeper recession.
There is no high impacting US data due for release today. However, there is plenty of US data to attract US Dollar investors' attention across the week, including PMI readings for March, private payrolls data and the all-important US non-farm payroll on Friday.
World stock markets mostly tumbled and oil prices plunged Monday despite fresh Chinese and Australian stimulus to shore up an economy shattered by the coronavirus fallout.
Australia was out on its own-its stock market surging 7.0 percent as the country's virus infections slowed, while after the close of trade in Sydney the government unveiled an income-support plan worth US$80 billion.
Crude oil meanwhile struck the lowest levels in more than 17 years on Monday, with Brent North Sea tumbling to $22.58 per barrel at one point. "Estimates for the (oil) demand side are being revised downwards on an almost daily basis, while on the supply side there is still no sign of any reconciliation between Saudi Arabia and Russia" regarding their price war, Commerzbank said in a client note.
There are warnings that oil could sink even further as storage tanks around the world approach full capacity. Elsewhere Monday, the dollar climbed across the board, while Asian stock markets mostly fell following Friday's steep drop on Wall Street and Europe.