PKR/USD Outlook:
Slightly positive, but likely to move sideways, as the rate is just above its recent average and lacks a clear driving factor.
Key drivers:
• Rate gap: The State Bank of Pakistan's recent measures to stabilize the PKR stand in contrast to the Federal Reserve's steadiness on interest rates.
• Risk/commodities: Oil prices being stable with no significant volatility have created a neutral environment for the PKR, influencing its performance against the USD.
• One macro factor: Ongoing geopolitical tensions negatively impacting the PKR could further erode market confidence.
Range:
The PKR/USD is expected to hold within recent levels, potentially drifting slightly as external factors play a role.
What could change it:
• Upside risk: A significant improvement in foreign investment following a resolution of geopolitical tensions could boost the PKR.
• Downside risk: Any new developments in the U.S. labor market that suggest stronger economic growth could drive the USD higher.