Rupee records marginal increase against US dollar

The Pakistani rupee registered marginal improvement, appreciating 0.04% against the US dollar in the inter-bank market on Tuesday.

At close, the local unit settled at 278.4, a gain of Re0.1 against the greenback, according to the State Bank of Pakistan (SBP).

On Monday, the local unit had settled at 278.5 against the US dollar.

In recent weeks, the domestic currency has largely been around 277-279 against the dollar as Pakistan moves forward with its plan to win a longer and larger International Monetary Fund (IMF) bailout programme.

Internationally, the US dollar hung near a multi-week low versus major peers on Tuesday, still smarting from Friday’s unexpectedly soft jobs report as traders awaited testimony from Federal Reserve Chair Jerome Powell for clues on the path of interest rates.

The euro held its ground after Monday’s sharp swings as investors come to terms with a hung parliament in France, which points to potential political gridlock but removes many fiscal concerns stemming from far-right or leftist victories.

The US dollar index, which measures the currency against the euro, sterling, yen and three other major peers, was flat at 104.99 in early Asian hours, sticking close to the overnight low of 104.80, a 3 1/2-week trough.

The index slumped 0.9% last week, exacerbated by Friday’s monthly payrolls report, which boosted bets for the Fed to soon start cutting rates.

Traders currently set about 76% odds for a rate cut at the September meeting, up from 66% a week ago, according to the CME Group’s FedWatch Tool. Another cut is expected by December.

Oil prices, a key indicator of currency parity, slipped on Tuesday after a hurricane that hit a key US oil-producing hub in Texas caused less damage than markets had expected, easing concerns over supply disruption.

Brent futures fell 49 cents or 0.6% to $85.26 a barrel by 0852 GMT, while US West Texas Intermediate (WTI) crude slipped 54 cents or 0.7% to $81.79.

Inter-bank market rates for dollar on Tuesday

BID                            Rs 278.40

OFFER                      Rs 278.60

Open-market movement

In the open market, the PKR lost 36 paise for buying and 50 paise for selling against USD, closing at 279.09 and 281.00, respectively.

Against Euro, the PKR lost 6 paise for buying and 4 paise for selling, closing at 299.31 and 302.14, respectively.

Against UAE Dirham, the PKR lost 4 paise for buying and 5 paise for selling, closing at 75.45 and 76.20, respectively.

Against Saudi Riyal, the PKR lost 6 paise for buying and 5 paise for selling, closing at 73.71 and 74.40, respectively.

Open-market rates for dollar on Tuesday

BID                            Rs 279.09

OFFER                      Rs 281.00