The Pakistani rupee extended its marginal gains, appreciating 0.01% against the US dollar in the interbank market on Thursday.
The local unit closed the day at 277.17, a gain of Re0.03 against the greenback.
On Wednesday, the Pakistani rupee settled at 277.20 against the dollar.
Internationally, the US dollar clung to a two-month high on Thursday after a strong manufacturing reading reignited inflation fears and rate-hike bets, while a weak Treasury auction sent yields higher across the curve, providing fresh impetus to the US currency.
The broad dollar strength pushed the euro to $1.1378, a two-month low, while sterling languished near a three-month nadir at $1.3231. The dollar index, which measures the US currency against a basket of peers, held near a two-month high at 101.1.
A stronger-than-expected purchasing managers’ report overnight fanned new price concerns, and a poorly received auction of five-year U.S. Treasury notes triggered a fresh round of bond selling, with five-year yields crossing 5% for the first time since 2007.
Inflation risks were also amplified by a nearly 4% jump in oil prices on Wednesday after Iran’s president vowed never to surrender, with markets also weighing US President Donald Trump’s diesel export ban.
Traders now see a nearly 70% chance of another increase when the US central bank next meets in October, according to CME Group’s FedWatch Tool, up from the 50% probability a week ago.
Oil prices, a key indicator of currency parity, rose more than 1% on Thursday as diplomatic talks between the US and Iran showed little sign of progress, while investors focused on uncertainty about a potential US ban on diesel exports.
Brent crude futures were up $1.63, or 1.58%, at $104.71 a barrel at 1200 GMT, while West Texas Intermediate futures were up $1.34, or 1.49%, at $93.53 a barrel.
Inter-bank market rates for dollar on Thursday
BID Rs 277.17
OFFER Rs 277.37
Open-market movement
In the open market, the PKR gained 5.00 paisa for buying and 2.00 paisa for selling against USD, closing at 278.12 and 279.20, respectively.
Against Euro, the PKR gained 1.02 rupee for buying and 1.03 rupee for selling, closing at 316.43 and 319.72, respectively.
Against UAE Dirham, the PKR remained unchanged for buying and gained 1.00 paisa for selling, closing at 75.70 and 76.28, respectively.
Against Saudi Riyal, the PKR gained 1.00 paisa for both buying and selling, closing at 74.01 and 74.51, respectively.
Open-market rates for dollar on Thursday
BID Rs 278.12
OFFER Rs 279.20
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