USD/PKR Outlook: Slightly weaker, but likely to move sideways as the rate is near recent lows and below the 90-day average.
Key drivers:
• Rate gap: The Federal Reserve may pursue rate cuts, while the State Bank of Pakistan aims for stabilization, widening the disparity between the USD and PKR.
• Risk/commodities: Persistent volatility in oil prices could pressure the PKR, especially if commodity markets remain erratic.
• Macro factor: Ongoing inflation concerns are present, with expectations for modest inflation in Pakistan, impacting economic stability.
Range: The USD/PKR is likely to hold within the recent range, with limited significant movement expected.
What could change it:
• Upside risk: Unexpected economic data from the U.S. could shift expectations for Federal Reserve policy direction.
• Downside risk: Further geopolitical tensions or negative economic indicators from Pakistan could heighten pressure on the PKR.
