The Pakistani rupee registered a marginal decline against the US dollar, depreciating 0.05% during the opening hours of trading in the inter-bank market on Tuesday.
At 10am, the currency was hovering at 278.30, a loss of Re0.13 against the greenback.
On Monday, the rupee had settled at 278.17, according to the State Bank of Pakistan (SBP).
Globally, the US dollar held firm and near recent peaks on Tuesday, on the eve of an expected interest rate cut in the United States, as traders ratchet long-term rate assumptions higher.
The friendless euro, which is heading for a calendar-year drop of nearly 5% on the dollar, was not far from the year’s lows at $1.0518.
The gap between US and German ten-year yields is 216 basis points and has widened nearly 70 bps in three months.
The Federal Reserve will announce its interest rate decision on Wednesday, and interest rate futures imply a 94% chance of a hike, even as services-sector activity leapt to a three-year high, according to an S&P Global purchasing managers survey.
According to the CME FedWatch tool, after a cut on Wednesday, markets see about a 37% chance there will be either one 25 bp cut or none at all through the whole of 2025, up from about 21% a week earlier.
Besides the Fed, the Bank of Japan, Bank of England and Norges Bank meet this week and are expected to stand pat on Thursday, while the Riksbank is seen cutting rates, perhaps by 50 basis points.
Oil prices, a key indicator of currency parity, were range-bound in early Asian trading on Tuesday as investors worried about Chinese demand and awaited further market direction from a US interest rate decision due on Wednesday.
US West Texas Intermediate crude was down 6 cents at $70.65 a barrel at 0112 GMT, while Brent crude futures fell 1 cent to $73.90 a barrel.
This is an intra-day update
American Dollar Exchange Rate