Rupee records marginal improvement against US dollar

The Pakistani rupee registered marginal improvement against the US dollar, appreciating 0.03% in the inter-bank market on Thursday.

At close, the currency settled at 278.66, a gain of Re0.08, against the greenback.

On Wednesday, the currency had settled at 278.74 against the US dollar.

In recent months, the domestic currency has largely been around 277-279 against the US currency as traders have an eye on some strong positive indicators.

Globally, the US dollar was on the defensive on Thursday after the Federal Reserve opened the door for an interest rate cut in September.

An action-packed Wednesday started with the BOJ raising Japan rates to levels not seen in 15 years, leading to traders reassessing popular carry trades before the Fed held rates steady but put rate cuts on the table as US inflation cools.

The dollar index, which measures the US currency against six peers, was down 0.1% at 103.95, having dropped 0.38% on Wednesday. The index fell 1.7% in July, its weakest monthly performance this year.

With the Fed staying data dependent, investor focus will be on Friday’s government jobs report for July. It is expected to show that employers added 175,000 jobs during the month, according to the median estimate of economists polled by Reuters. July inflation report will be the next key data and is due to be released on Aug. 14.

Markets have been fully pricing in a 25 basis points (bps) of rate cut in September for some time and added to wagers of the Fed going big even after Fed Chair Jerome Powell said policymakers are not thinking about a 50-basis-point interest rate cut “right now”.

Traders are now anticipating 72 bps of easing this year.

Oil prices, a key indicator of currency parity, ose on Thursday, extending gains from the previous session, after the killing of a Hamas leader in Iran raised the threat of a wider Middle East conflict and concern over its impact on oil.

Global benchmark Brent crude futures rose 78 cents, or 1%, to $81.62 a barrel by 0800 GMT, while US West Texas Intermediate crude futures gained 79 cents, also 1%, to $78.70 a barrel.

The most active contracts on both benchmarks jumped about 4% in the previous session.

Inter-bank market rates for dollar on Thursday

BID                            Rs 278.66

OFFER                      Rs 278.86

Open-market movement

In the open market, the PKR gained 1 paisa for both buying and selling against USD, closing at 279.26 and 280.49, respectively.

Against Euro, the PKR lost 15 paise for buying and gained 24 paise for selling, closing at 300.50 and 302.55, respectively.

Against UAE Dirham, the PKR lost 7 paise for buying and remained unchanged for selling, closing at 75.84 and 76.35, respectively.

Against Saudi Riyal, the PKR lost 10 paise for buying and remained unchanged for selling, closing at 74.11 and 74.60, respectively.

Open-market rates for dollar on Thursday

BID                            Rs 279.26

OFFER                      Rs 280.49