The Pakistani rupee saw a slight improvement on Tuesday, appreciating by 0.04% against the US dollar in the inter-bank market. By the close, the local currency stood at 278.4, marking a gain of Re0.1 against the greenback, as reported by the State Bank of Pakistan (SBP).
On Monday, the Pakistani rupee was valued at 278.5 against the US dollar. Recently, the rupee has mostly stayed within the range of 277-279 against the dollar as Pakistan works towards securing a larger and longer-term bailout program from the International Monetary Fund (IMF).
Globally, the US dollar remained near a multi-week low against major currencies on Tuesday. This came after a weaker-than-expected jobs report on Friday, which led traders to look forward to testimony from Federal Reserve Chair Jerome Powell for hints about future interest rate changes.
The euro remained stable after some sharp fluctuations on Monday as investors processed the results of France's parliamentary elections, which led to a hung parliament. While this could cause political gridlock, it also eases worries about extreme fiscal changes that could have come from far-right or leftist victories.
The US dollar index, which compares the dollar against other major currencies like the euro, pound, and yen, was steady at 104.99 during early Asian trading hours. This was close to the overnight low of 104.80, the lowest in three and a half weeks. Last week, the index dropped by 0.9%, particularly after the payrolls report on Friday, which increased the chances of the Federal Reserve cutting interest rates soon.
Traders now believe there's a 76% chance of a rate cut in the Fed's September meeting, up from 66% a week earlier, according to the CME Group’s FedWatch Tool. Another cut is expected by December.
Oil prices, which play an important role in currency exchange rates, fell on Tuesday. This happened after a hurricane hit a major oil-producing area in Texas but caused less damage than expected, reducing concerns about supply disruptions. Brent crude dropped by 49 cents, or 0.6%, to $85.26 a barrel, while US West Texas Intermediate (WTI) crude fell by 54 cents, or 0.7%, to $81.79 a barrel.
Inter-bank market rates for the dollar on Tuesday:
- Buying: Rs 278.40
- Selling: Rs 278.60
In the open market, the Pakistani rupee lost value against the US dollar, euro, UAE dirham, and Saudi riyal. It fell by 36 paise for buying and 50 paise for selling against the US dollar, closing at 279.09 and 281.00, respectively.
Against the euro, the rupee dropped by 6 paise for buying and 4 paise for selling, closing at 299.31 and 302.14, respectively. Against the UAE dirham, it declined by 4 paise for buying and 5 paise for selling, closing at 75.45 and 76.20, respectively. Against the Saudi riyal, it decreased by 6 paise for buying and 5 paise for selling, closing at 73.71 and 74.40, respectively.
Open-market rates for the dollar on Tuesday:
- Buying: Rs 279.09
- Selling: Rs 281.00
