Rupee inches upward against US dollar

The Pakistani rupee recorded marginal improvement against the US dollar in the inter-bank market on Monday.

At close, the currency settled at 280.71, a gain of Re0.01 against the greenback.

During the previous week, the Pakistan rupee posted marginal gain for another week as it appreciated by Re0.10 or 0.04% against the US dollar in the inter-bank market.

The local unit closed at 280.72, against 280.82 it had closed the week earlier against the greenback, according to the State Bank of Pakistan (SBP).

Internationally, the US dollar firmed slightly on Monday as investors braced for the release of a slew of US economic data following the end of the government shutdown, hoping it would add clarity to the Federal Reserve’s rate outlook in December.

Market reaction to US President Donald Trump’s U-turn on more than 200 food products was muted, with some analysts saying the move was not a surprise due to cost-of-living issues.

Elsewhere, sterling remained under pressure following a whirlwind Friday session as speculation swirled around the UK government’s highly anticipated November 26 budget.

The focus this week will be on various US data releases for clues on the health of the world’s largest economy, with the closely watched September nonfarm payrolls report due on Thursday.

Despite signs of further weakness in the US economy from recent private-sector data, investors have trimmed expectations of a Fed cut next month, betting that gaps in economic data will delay or even derail further easing.

Markets are now pricing in just over a 40% chance of a 25-basis-point rate cut next month, down from over 60% earlier this month.
However, that has failed to substantially lift the dollar, which last week was caught up in a broad selloff alongside US stocks and bonds.

Oil prices, a key indicator of currency parity, fell on Monday, erasing last week’s gains, as loadings resumed at the key Russian export hub of Novorossiysk, after a two-day suspension at the Black Sea port that had been hit by a Ukrainian attack.

Brent crude futures dropped 44 cents, or 0.68%, to $63.95 a barrel by 0751 GMT. US West Texas Intermediate (WTI) crude futures were trading at $59.61 a barrel, down 48 cents, or 0.8% from Friday’s close.