US Dollar

The greenback was heading for its eighth-straight week of gains against a basket of other major currencies on Friday, its best run since winter 2014-2015. It has gained 5 per cent since mid-July, CNN reported,

Rather than looking at index movements, investors may focus on performing sectors like capital goods, automobiles and construction. High quality banking stocks present opportunities for buy on dips, he said.

In the near term the spike in the US 10-year bond yield above 4 per cent has triggered selling by FIIs who might be moving some money to the US bonds. The domestic market construct continues to be resilient. Thursday's US CPI inflation print will be keenly watched by markets, he said.

Fitch Rating downgraded its US debt rating to AA+ from AAA. The Rating downgrade reflects the expected fiscal deterioration over the next three years, a high and growing government debt burden, and erosion of governance. Treasury Secretary Janet Yellen quickly responded to the downgrade, calling it “arbitrary” and “outdated.”

While these strong headwinds can impact the market, support can come from the strong US 2nd quarter GDP number of 2.4 per cent. Since the ongoing global rally, led by the mother market US, is primarily driven by the US soft landing narrative, this data can provide some support when the market turns weak.

The State Bank of Pakistan (SBP) said the greenback traded at 283.04 PKR in the interbank market on Tuesday, Xinhua news agency reported.The U.S. dollar closed at 279.26 PKR on Monday.

The heavy inflow helps the market to surge higher, the report said. Last week, the volatility index India VIX ended at 10.68, which was the lowest closing since December 2019. This decline in volatility indicates that there is less fear in the market and investors have adopted risk-on mode, the report said.