pk-china-user Pakistani rupee extends gains against US dollar in interbank market
The Pakistani rupee continued its marginal upward movement against the US dollar, appreciating by 0.01% in the interbank market on Tuesday.
The local currency closed at 277.12 per US dollar, gaining Re0.03 from the previous session’s level of 277.15.
The rupee had settled at 277.15 against the dollar on Monday.
Meanwhile, Finance Minister Muhammad Aurangzeb chaired a kick-off meeting with the International Monetary Fund (IMF) mission on Tuesday, according to a statement issued by the Ministry of Finance.
The IMF mission is currently in Islamabad for the fourth review of Pakistan’s Extended Fund Facility (EFF) programme and the third review under the Resilience and Sustainability Facility (RSF).
In international markets, the US dollar remained near a two-month high on Tuesday, supported by volatile oil prices and a sharp rise in US Treasury yields. However, its gains remained limited as investors awaited key US economic data due later in the week for indications about the Federal Reserve’s future interest-rate policy.
The euro traded close to its weakest level in three months at $1.1367, following comments from the European Central Bank chief indicating a measured approach toward controlling inflation. Sterling remained broadly stable at $1.3248, also near a three-month low.
The dollar index, which measures the US currency against a basket of major currencies, edged up to 101.2 and was on course for a 1.8% monthly increase, which would mark its strongest monthly performance since June.
Meanwhile, continued selling in US Treasury bonds pushed yields higher. The benchmark 10-year Treasury yield reached its highest level since 2007, while the 30-year yield climbed to its highest since 2004.
The two-year Treasury yield, which is particularly sensitive to monetary policy expectations, also rose to its highest level in more than two years and approached 5%.
Investors were awaiting key US economic indicators later in the week, including the PCE price index on Wednesday and nonfarm payrolls on Friday, which could provide further clues about the Federal Reserve’s interest-rate trajectory.
According to CME Group’s FedWatch tool, markets were pricing in a more than 70% probability of a Federal Reserve rate hike at the end of October, compared with 57% a week earlier.
Oil prices, another important factor influencing currency markets, declined on Tuesday as investors focused on signs of recovering crude exports from the Middle East, alongside ongoing concerns about potential supply disruptions linked to the conflict involving the US, Israel and Iran.
Brent crude futures fell $1.96, or 1.86%, to $103.32 per barrel at 1306 GMT, while US West Texas Intermediate (WTI) crude declined $1.95, or 2.11%, to $90.65 per barrel.
Interbank market rates for the US dollar on Tuesday
- Bid: Rs277.12
- Offer: Rs277.32
