- The US dollar has drifted ever so slightly to the downside against the Pakistani Rupee during the trading session on Monday as we continue to see some negative pressure.
- That being said, you should keep in mind that the central bank in Pakistan is very active in this market, and therefore you can only read so much into the short term momentum.
- After all, the market does tend to be very thin, so you have to trade this from the longer-term perspective.
US Dollar drifts lower against emerging markets
The US dollar has been drifting lower against emerging markets in general, so that should not be a huge surprise to see it behaving very similarly against the Rupee. In general, I think this is a market that will continue to be very noisy, but in general somewhat negative until of course we get some type of major “risk off” type of move around the world. Furthermore, you must pay close attention to what the central bank in Pakistan decides is the acceptable trading range, because the Federal Reserve clearly won’t have much to say.
Top Forex Brokers
However, it’s also worth noting that the Federal Reserve does have an interest rate decision in the middle of the week, so that could throw some volatility into the mix. The 282 level above I think is a short-term resistance. That is worth paying close attention to, and therefore if we were to reach that area and show signs of exhaustion, you may talk me into starting short again. In general, this is a pair that’s more or less held from the longer-term standpoint than anything else.
Keep in mind that the interest rate in Pakistan is a whopping 22%, as they continue to see massive amounts of inflation. The fact that the US dollar can hold its head up against this currency shows just how weak it is, despite the fact that there is a massive interest rate differential. If you can find a place to trade this currency pair, it obviously favors the Pakistani Rupee, but it is more of an investment like a bond than anything else.
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