Intra-day update: rupee remains largely stable against US dollar

The Pakistani rupee remained largely stable against the US dollar, depreciating 0.02% during the opening hours of trading in the inter-bank market on Monday.

At 10:30am, the currency was hovering at 278.17, a loss of Re0.04 against the greenback.

During the previous week, the rupee posted marginal gain as it appreciated by Re0.27 or 0.1% against the US dollar.

The local unit closed at 278.13, against 278.40 it had closed the week earlier against the greenback, according to the State Bank of Pakistan (SBP).

Globally, the US dollar eased on Monday in the initial reaction to US President Joe Biden’s decision to end his re-election campaign, clearing the way for another Democrat to challenge Donald Trump. China’s yuan was largely unfazed by the central bank’s decision to cut a key interest rate.

The US currency slipped 0.08% to 157.38 yen early in the Asian day, while the euro gained 0.11% to $1.0895.

The US Federal Reserve will next hold a Federal Open Market Committee (FOMC) meeting on interest rates on July 30-31, at which investors expect the Fed to keep the rates unchanged, while looking for any signal of a cut coming later in the year.

On the political front, Biden announced he was exiting the race on Sunday, and endorsed Vice President Kamala Harris to replace him as the Democratic candidate in the November election.

Former President Trump, the Republican nominee, sits well ahead in betting markets following Biden’s disatrous debate performance last month and a surge in questions about his mental competence. Commonwealth Bank of Australia strategist Joseph Capurso warned it was too early to read too much in the dollar’s reaction.

Oil prices, a key indicator of currency parity, rose in early trade on Monday as investors keep a lookout for signs of a rate-cut cycle expected to begin as soon as September.

Brent crude prices were up 48 cents, or 0.57%, at $83.10 a barrel by 0035 GMT, and US West Texas Intermediate crude futures rose 42 cents, or 0.52%, to $80.55.

This is an intra-day update