The Pakistani rupee extended its marginal gains against the US dollar on Thursday.
The local unit closed the day at 277.81, a gain of Re0.01 against the greenback.
On Wednesday, the Pakistani rupee settled at 277.82 against the dollar.
Globally, the US dollar found its footing at the start of Asian trading on Thursday after the Federal Reserve kept its policy interest rate on hold and Chair Kevin Warsh left markets guessing about how divisions on its rate-setting committee would resolve.
The dollar index, which measures the greenback’s strength against six currencies, nudged up 0.1% to 100.89 after the US said it was conducting air strikes in Iran.
The British pound was 0.1% weaker at $1.3355 ahead of a Bank of England interest rate decision on Thursday, with market participants expecting no change. The euro slid 0.1% to $1.1457.
The Australian dollar was steady along with its New Zealand counterpart at $0.6959 and $0.5795 respectively, while the yen was level at 163.455 yen per U.S. dollar.
Geopolitical developments offset earlier weakness in the greenback, which had fallen to its weakest since July 20 after the Fed decision.
Treasury bonds reacted violently to the Fed decision, with the 30-year yield climbing to its highest in almost two decades.
Fed funds futures are pricing in an implied 42.6% probability that the Fed will hold its rate at its next two-day meeting ending September 16, compared with a 24% chance before the Fed’s latest meeting, the CME Group’s FedWatch tool showed.
Oil prices erased some of their previous gains on Thursday, despite escalating attacks in the Gulf as investor focus shifted to supply flows through the key choke points in the region.
Brent futures fell 96 cents, or 1.06%, to $89.78 a barrel as of 0418 GMT.
US West Texas Intermediate (WTI) crude fell 64 cents, or 0.76%, to $83.82 a barrel.
Brent settled up 7.91% in the previous session and WTI up 6.56% in one of the sharpest spikes of the Iran war, reversing a 5% plunge on Tuesday after a pause in hostilities in the five-month conflict.
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