Recent developments surrounding the USD to PKR exchange rate indicate a complex interplay of factors affecting both currencies. Analysts note that the US dollar has faced pressure due to mixed employment data, which hinted at a potential for Federal Reserve dovishness, despite maintaining expectations for interest rates to remain stable through December. The recent rise in payrolls for September may have bolstered the dollar momentarily, but rising unemployment and downward revisions of prior payroll figures have led to cautious sentiment among investors. Upcoming US S&P PMIs could further influence this trend if signs of slowing private-sector activity emerge.
On the PKR side, the Pakistani rupee has experienced significant volatility, depreciating approximately 12% against the USD since the beginning of 2025, with forecasts suggesting a potential decline towards the 100 PKR/USD mark by year-end. Contributing factors include mounting geopolitical tensions, which have diminished remittances and investor confidence, exacerbating trade deficits. Nonetheless, the rupee has seen some support from record remittance inflows, which surged to $38.3 billion in the fiscal year 2024-25, presenting a contrasting element to the overall negative sentiment.
The positive influence of an IMF staff-level agreement further boosts the PKR, encouraging market optimism. However, the State Bank of Pakistan's recent interventions to stabilize the currency by purchasing USD have created an artificial demand for the rupee, distancing it from market fundamentals.
As of now, the USD to PKR exchange rate is trading at 7-day highs near 282.6, consistent with its 3-month average and reflecting a stable range around 1.2% from 280.6 to 284.1. Market experts suggest that continued geopolitical stresses, combined with domestic economic indicators, will play a crucial role in directing future currency movements. Investors are advised to monitor these developments closely to navigate potential impacts on international transactions effectively.
