The rupee managed to recover modestly against the dollar on the money market on Thursday in the process of trading activity, dealers said.
In the fourth Asian trade, the euro was mired near a two-month low on Thursday before a European Central Bank meeting that could signal monetary easing as growth in the currency zone falters.
Sentiment towards the single currency took a big hit after data on Wednesday showed Germany's manufacturing sector contracted at the fastest pace in seven years while French business growth unexpectedly slowed, sending European bond yields lower.
The common currency traded at $1.11350 after touching $1.11270, its lowest since May 31. The euro has fallen 2.0% this month on increased speculation the ECB would join other central banks in easing policy as a trade war between the United States and China weakens the global economy.
The dollar index, which measures the greenback against six major currencies, stood at 97.725 after touching an eight-week high of 97.810 on Wednesday.
The dollar was trading against the Indian rupee at Rs 68.963, the US currency was available at 68.98 in terms of the Malaysian ringgit and the greenback was at 6.876 versus the Chinese yuan.
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Open Bid Rs.160.20
Open Offer Rs.160.70
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Bid Rate Rs.160.40
Offer Rate Rs.160.50
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The short supply phenomenon of the greenback prevailed for another day in the market which helped its further appreciation for buying and selling at Rs 160.30 and Rs 160.80 against the previous closing rates of Rs 160.10 and Rs 160.75 respectively, local currency dealers said.
Likewise, the rupee also followed the suit in relation to the pound sterling. Consequently, the pound's buying and selling rates further improved from the Wednesday's closing of Rs 199.50 and Rs 200.40 to Rs 199.85 and Rs 200.60 respectively, they added.
The dollar opened at Rs 160.25 (buying) and Rs 160.80 (selling) against last rate of Rs 160.80 (buying) and Rs 160.90 (selling). It closed at Rs 160.25 (buying) and Rs 160.80 (selling).
The buying and selling rates of one tola of gold remained at Rs 84,200 (selling) and Rs 83,900 (buying) in the local Sarafa (gold) markets of Rawalpindi and Islamabad.