Rupee records marginal increase against US dollar

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

At close, the currency settled at 278.12 for a gain of Re0.11 against the greenback.

On Thursday, the rupee had settled at 278.23, according to the State Bank of Pakistan (SBP).

Globally, the US dollar rose to a 2 1/2-week high against major peers on Friday, on track for its best week in a month, amid bets that the Federal Reserve would cut interest rates next week but then take a patient approach to further reductions.

The US currency was also supported against the euro and Swiss franc following rate cuts at those central banks a day earlier, and versus the yen amid speculation the Bank of Japan will forgo a rate hike at its meeting next week.

The dollar index, which measures the currency against the euro, yen and three other rivals, ticked up to 107.05 for the first time since Nov. 26.

For the week, the index is up more than 1%.

Some softness in US producer price figures released overnight, despite a heated headline figure, kept market conviction high for a Fed cut on Dec. 18, while a rise in unemployment claims showed the job market gradually cooling in line with expectations.

Traders see an easing at the upcoming meeting as a certainty, but lay 21% odds on another one coming in January, according to CME’s FedWatch tool.

Oil prices, a key indicator of currency parity, stabilised on Friday, heading for their first weekly rise since the end of November, as additional sanctions on Iran and Russia ratcheted up supply worries, while a surplus outlook weighed on markets.

Brent crude futures edged up 7 cents to $73.48 a barrel by 0434 GMT, while US West Texas Intermediate crude was at $70.11 a barrel, up 9 cents.

Inter-bank market rates for dollar on Friday

BID                            Rs 278.12

OFFER                      Rs 278.32

Open-market movement

In the open market, the PKR gained 2 paise for buying and 3 paise for selling against USD, closing at 277.28 and 279.07, respectively.

Against Euro, the PKR gained 1.05 rupee for buying and 93 paise for selling, closing at 289.40 and 291.66, respectively.

Against UAE Dirham, the PKR remained unchanged for both buying and selling, closing at 75.45 and 76.00, respectively.

Against Saudi Riyal, the PKR lost 1 paisa for buying and remained unchanged for selling, closing at 73.74 and 74.25, respectively.

Open-market rates for dollar on Friday

BID                            Rs 277.28

OFFER                      Rs 279.07