The exchange rate forecast for USD to PKR reflects a range of factors influencing both currencies. The USD has remained largely rangebound, trading recently at 14-day lows around 281.6 PKR, which is just 0.7% below its three-month average of 283.5 PKR. Analysts note that the USD is showing signs of stability within a narrow range of 1.8%, fluctuating between 280.2 and 285.3 PKR. This stability persists despite rising inflation in the U.S., which recently reached a seven-month high in August.
Market expectations indicate that investors are pricing in multiple interest rate cuts by the Federal Reserve through 2025, which may hinder the USD's strength. Any deterioration in consumer sentiment could add selling pressure on the dollar, as forecasters monitor the upcoming consumer sentiment index closely.
On the other hand, the Pakistani Rupee (PKR) has recently experienced influences from several domestic and international developments. The State Bank of Pakistan's decision to reduce the key interest rate by 50 basis points to 10.5% was aimed at stabilizing the economy amidst lowered inflation rates. Additionally, a crackdown on black market dollar trading has provided a temporary boost to the PKR, although shifting to digital platforms poses ongoing enforcement challenges.
Geopolitical tensions with India and a newly signed trade agreement with the United States focusing on energy and mining investments add layers of complexity to the PKR's valuation. Economists suggest that while external conditions remain volatile, these developments may help stabilize the PKR against the USD in the medium term.
In summary, the interplay of interest rate policies, inflation rates, and geopolitical dynamics will continue to shape the USD to PKR exchange rate. As conditions evolve, both currencies may exhibit volatility, influenced by domestic actions and international market trends. Investors are advised to stay alert to these factors as they may impact the cost of international transactions in the near future.
