KARACHI: The dollar felt the jitters of the US presidential election outcome on Wednesday, which helped the pound and the euro gain against the greenback.
Dealers said major currencies in the international market remained vulnerable during the US presidential election. “The fate of the dollar may not be grim in the long run, but the pound and the euro found space to gain against the US currency as Donald Trump won the election,” said Forex Association of Pakistan President Malik Bostan.
The business community, which had been watching the US election keenly, found its outcome to be unexpected and shocking. They perceive the president-elect as a hardliner who can pursue the radical policy of protectionism.
“The euro and the pound gained 1 per cent to 1.5pc against the dollar at the early signs of a Trump victory as soon as voting started. The dollar bounced back when the likely result seemed to favour Hillary Clinton, but lost ground again after the race finished in Mr Trump’s victory,” said Bostan.
However, the local currency market did not respond to the unexpected result. “The currency market remained cool and calm. There was no panic buying or selling. The dollar was traded with a slight fluctuation, which was normal,” said Anwar Jamal, another currency dealer in the open market. He said the pound and the euro gained about 0.25pc to 0.5pc in the local market.
Another important development in the currency market was the announcement of the Indian government to do away with the banknotes of 500 and 1,000 Indian rupees. The Indian government has asked people to deposit these currency notes in banks before December 30.
Currency dealers said they have been receiving queries from the holders of Indian currency notes in Pakistan.
“We are not trading Indian banknotes. But we are being approached by people who wish to sell them,” said Mr Bostan. He added that the currency market is in touch with the Dubai international currency market for the future of these banknotes.
“Top currency dealers like Wall Street will provide us with the rates for the said currency notes on Thursday. This will be the line of action for us. We will trade the Indian banknotes that will cease to be legal tender by the end of 2016,” he said.
The total worth of Indian banknotes in Pakistan is not known, but currency dealers said Pakistanis who visit India tend to keep some Indian currency.