USD/PKR Outlook: The outlook is slightly weaker, but likely to move sideways as the rate is below its recent average and near recent lows, showing limited drivers for change.
Key drivers:
• Rate gap: The Federal Reserve is expected to implement rate cuts, potentially weakening the USD against the PKR.
• Risk/commodities: The ongoing volatility due to tariff concerns and geopolitical tensions is adding pressure to the USD.
• One macro factor: The PKR has shown signs of stabilization, indicating improved market confidence and potential support for the Rupee.
Range: The USD/PKR is likely to drift within its recent 3-month range as both currencies react to their respective economic developments.
What could change it:
• Upside risk: A sudden shift in U.S. economic data, particularly strong jobs reports, could bolster the USD.
• Downside risk: Continued tariff uncertainties and geopolitical tensions could further pressure the USD, encouraging a lower exchange rate.