The Pakistani rupee weakened marginally against the US dollar, depreciating 0.02% during the opening hours of trading on Monday.
At 10am, the local currency settled at 283, a loss of Re0.04 against the greenback.
During the previous week, rupee weakened as it depreciated Re0.79 or 0.28% against the US dollar. The local unit closed at 282.96, against 282.17 it had closed the week earlier against the greenback, according to the State Bank of Pakistan (SBP).
Globally, the US dollar firmed against major currencies on Monday, driven by safe-haven buying from investors fearing the Israel-Iran fighting could escalate into a broader regional conflict as they braced for a week packed with central bank meetings.
As both Iran and Israel showed no signs of backing off from their attacks, the prospect that Tehran might seek to choke off the Strait of Hormuz – the world’s most important gateway for oil shipping – raised broader economic risks from disruptions in the energy rich Middle East.
Scheduled weekend talks between Iran and the United States on Tehran’s nuclear programme were also shelved after Israel launched its surprise attack on Friday.
On Monday, the dollar rose 0.14% to 144.3 Japanese yen, while the euro was 0.14% lower at $1.1534. In early Asia hours, the greenback was steady against the Swiss franc at 0.81, while an index that measures the dollar against six others was steady at 98.25.
Currencies that are positively correlated to risk such as the Australian dollar and the New Zealand Dollar were marginally higher.
Geopolitical tensions were the latest twist for investors and central bank policymakers who have been trying to navigate economic uncertainty triggered by U.S. President Donald Trump’s move to reshape the global trade order this year.
Despite the US dollar’s broader rise in the past few sessions, analysts were less convinced that the trend could continue until there was more clarity on the tariff front.
The currency has lost over 9% in value this year as investors remain nervous over Trump’s deadline on trade deals that come due in about three weeks, while agreements with major trade partners including the European Union and Japan are yet to be signed.
Investors now will look progress in any bilateral meetings with the U.S. on the side of a Group of Seven leaders meet in Canada.
Oil prices, a key indicator of currency parity, climbed on Monday, extending Friday’s rally, as renewed strikes by Israel and Iran over the weekend increased concerns that the battle could widen across the region and significantly disrupt oil exports from the Middle East.
Brent crude futures rose $1.12, or 1.5%, to $75.35 a barrel by 0019 GMT, while U.S. West Texas Intermediate crude futures gained $1.10, or 1.5%, to $74.08. They had surged more than $4 earlier in the session.
Both benchmarks settled 7% higher on Friday, having surged more than 13% during the session to their highest levels since January.
This is an intra-day update
American Dollar Exchange Rate