Rupee strengthens marginally against US dollar

The Pakistani rupee strengthened against the US dollar, appreciating 0.06% against the US dollar in the inter-bank market on Friday.

At close, the local unit settled at 278.33, a gain of Re0.17 against the greenback, as per the State Bank of Pakistan (SBP).

On Thursday, the rupee had closed at 278.50, down by Re0.10.

In recent weeks, the local currency has largely been around 277-278 against the dollar as Pakistan moves forward with its plan to grab a longer and larger International Monetary Fund (IMF) bailout programme.

Globally, the US dollar was licking wounds against peer currencies on Friday after a downward revision to US GDP for the first quarter suggested room for rate cuts this year, while investors braced for inflation data.

Official data showed overnight that the US economy grew at an 1.3% annualised rate from January through March, down from the advance estimate of 1.6% after downward revisions to consumer spending.

Meanwhile, New York Fed President John Williams on Thursday said he feels there is ample evidence that monetary policy is helping to bring inflation down.

The dollar index, which measures the currency against six major peers, last consolidated around 104.76 after dipping as low as 104.63 overnight.

Markets currently priced in a 55% chance of rate cuts to begin in September, up from 51% a day before, according to the CME Group’s FedWatch Tool.

Oil prices, a key indicator of currency parity, fell in Asia on Friday as comments from a Federal Reserve official bolstered expectations of rates staying higher for longer, a view that will be tested later in the day with a keenly-awaited US inflation report.

The market, which is waiting on a weekend OPEC+ decision on production cuts, was weighed down in overnight trade by a surprise build in US gasoline stocks.