Rupee registers gain against US dollar
- Currency settles at 276.62 against greenback
The Pakistani Rupee gained marginally against the US Dollar, closing at 276.62 in the inter-bank market, despite the US Dollar strengthening globally due to inflation and Fed rate hike expectations.
- Pakistani Rupee's continued appreciation against the US dollar.
- Global strength of the US dollar due to inflation and Fed rate hikes.
- Open market exchange rates for PKR against multiple currencies.
- Influence of oil prices and geopolitical events on currency markets.
The Pakistani rupee continued its marginal gain against the US dollar, appreciating 0.01% in the inter-bank market on Wednesday.
The local unit closed the day at 276.62, a gain of Re0.03 against the greenback.
On Tuesday, the rupee had closed at 276.65 against the dollar.
The Asian Development Bank (ADB) approved contingent disaster financing (CDF) facilities totalling $500 million under its policy-based lending to help Pakistan to withstand and respond to disasters. The CDF would provide prompt budget support following eligible disaster events to help reduce the economic and fiscal impacts, read a statement.
Internationally, the US dollar held gains near a two-week high in early Asian trade on Wednesday as a hotter-than-expected inflation report and hawkish comments from Federal Reserve officials fuelled bets the central bank will raise rates next month.
The US dollar index, which measures the greenback’s strength against a basket of six currencies, was steady at 102.22, closing in on its highest level since October 28.
The gauge traded up 0.5% on Tuesday after data showed US consumer prices increased by more than expected in October amid higher costs for food and accommodation.
The dollar held onto its gains against its major peers in early Asian trading.
The euro and the British pound were flat at $1.1168 and $1.3345, respectively. Against the yen, the US dollar was unchanged at 158.715 yen.
The Australian dollar was up 0.1% at $0.6870, edging back from a seven-month low, while the New Zealand dollar was flat at $0.5605.
Comments from voting members of the Federal Reserve’s rate-setting committee signalling unease over high inflation have firmed expectations for further rate hikes, prompting traders to all but abandon bets that the US central bank will stand pat at its next policy meeting, which concludes on December 9.
Fed funds futures now imply a 91.9% chance of a 25-basis-point rate hike next month, up from 84% a day earlier, according to CME Group’s FedWatch tool. Markets have fully priced out the possibility of a pause and see a 9.1% chance of a larger 50-basis-point move, while assigning better-than-even odds to a second hike in January.
Oil prices, a key indicator of currency parity, rose about 1% on Wednesday after dropping to two-month lows in the previous session, after Iran’s security chief said Tehran would not allow any enriched nuclear material to leave the country.
Washington has said nuclear matters must be part of any initial negotiations with Tehran aimed at ending the US-Israeli war on Iran.
Brent futures were up $1.22, or 1.3%, at $92.71 a barrel by 1412 GMT. US West Texas Intermediate crude gained $1.09, or 1.3%, to $87.13.
Inter-bank market rates for dollar on Wednesday
BID Rs 276.62
OFFER Rs 276.82
Open-market movement
In the open market, the PKR gained 18 paise for buying and 11 paise for selling against USD, closing at 277.12 and 278.33, respectively.
Against Euro, the PKR gained 2.21 rupees for buying and 1.84 rupee for selling, closing at 308.37 and 311.61, respectively.
Against UAE Dirham, the PKR gained 5 paise for buying and 2 paise selling, closing at 75.48 and 76.10, respectively.
Against Saudi Riyal, the PKR gained 5 paise for buying and lost 3 paise for selling, closing at 73.79 and 74.38, respectively.
Open-market rates for dollar on Wednesday
BID Rs 277.12
OFFER Rs 278.33