Rupee registers gain against US dollar

The Pakistani rupee stretched its marginal gains against the US dollar in the interbank market on Wednesday.

The local unit closed the day at 276.95, a gain of Re0.01 against the greenback.

On Tuesday, the Pakistani rupee settled at 276.96 against the dollar.

Internationally, the US dollar languished on Wednesday as traders awaited fresh signals on the timing for interest rate hikes to contend with persistent inflation.

The greenback weakened from an 18-month high ​in the previous session as oil prices eased and investors reassessed the AI-fueled rally ‌that has supported demand for US assets.

The euro clung to gains as budget concerns in France kept regional bond yields elevated and markets on edge.

Attention now focuses on the release of US consumer price index data as ​well as speeches from Federal Reserve policymakers that could clarify the outlook for interest rates.

The dollar index, which ​measures the greenback against a basket of currencies, edged 0.02% lower to 102.16, following a 0.35% slide on Tuesday.

The euro rose 0.04% at $1.1203.

The yen was little changed at 158.32 per dollar, and sterling rose 0.03% to $1.3256.

The dollar extended ​losses on Tuesday after New York Fed President John Williams said he still expects one more rate ​hike this year, but sees no need for further increases in 2027.

The US Labor Department is due to release ‌its ⁠CPI for September, which is expected to have risen 0.6% month-on-month after increasing 0.4% in August, while annual inflation is seen accelerating to 3.6% from 3.4%. Additionally, the Fed is due to publish its Beige Book.

Traders see a 77% chance that the Fed will leave rates unchanged at its October 27-28 ​meeting, up from 51% ​a month ago, while ⁠pricing in about 75 basis points of tightening by late 2027, CME Group’s FedWatch Tool showed.

Oil prices, a key indicator of currency parity, climbed on Wednesday after two vessels were struck in the Strait of Hormuz and Iranian officials told Reuters they were deploying new tactics to target ships, as Tehran seeks to keep oil prices high and influence the US midterm elections.

Brent crude futures rose 63 cents, or 0.6%, to $106.32 a barrel by 0345 GMT, while US West Texas Intermediate crude futures gained 66 cents, or 0.7%, to $94.80 a barrel.

Both contracts rose more than $1 in earlier trade before paring some gains.