The Pakistani rupee recorded marginal improvement against the US dollar on Tuesday, appreciating 0.03% in the inter-bank market.
At close, the currency settled at 277.80, a gain of Re0.07 against the US dollar.
On Monday, the rupee had settled at 277.87, according to the State Bank of Pakistan (SBP).
The currency market is now factoring in the International Monetary Fund (IMF) Executive Board meeting that is scheduled to take Pakistan’s 37-month Extended Fund Facility (EFF) of about $7 billion on its agenda on September 25.
Globally, the Indian rupee is expected to open little changed to slightly higher on Tuesday amid a dovish Federal Reserve outlook, though the upside is seen largely capped following the price action in the previous session.
The 1-month non-deliverable forward indicated that the rupee will open at 83.53-83.55 to the US dollar compared with 83.5525 in the previous session.
The likelihood of one more 50 basis points rate cut by the U.S. central bank at their next meeting in November is expected to be supportive of rupee and other Asian currencies.
Odds of 50 bps rate cut at that meeting have now climbed to 54% from 30% a week back, per the CME FedWatch Tool. The odds were just 10% a month back
Fed officials on Monday backed more rate cuts to protect the labour market, though the pace at which they will slash borrowing cost remained uncertain.
Focus now turns to Fed Chair Jerome Powell’s remarks on Thursday.
Oil prices, a key indicator of currency parity, jumped more than 2% on Tuesday on news of monetary stimulus from top importer China and concerns that conflict in the Middle East could hit regional supply while another hurricane threatened supply in the United States, the world’s biggest crude producer.
Brent crude futures were up $1.76, or 2.4%, at $75.66 a barrel by 1132 GMT. US WTI crude futures rose $1.84, or 2.6%, to $72.21.
Inter-bank market rates for dollar on Tuesday
BID Rs 277.80
OFFER Rs 278.00
Open-market movement
In the open market, the PKR gained 31 paise for buying and 23 paise for selling against USD, closing at 279.06 and 280.45, respectively.
Against Euro, the PKR lost 70 paise for buying and 53 paise for selling, closing at 307.54 and 310.39, respectively.
Against UAE Dirham, the PKR gained 9 paise for buying and 12 paise for
selling, closing at 75.36 and 76.08, respectively.
Against Saudi Riyal, the PKR gained 9 paise for buying and 11 paise for selling, closing at 73.61 and 74.28, respectively.
Open-market rates for dollar on Tuesday
BID Rs 279.06
OFFER Rs 280.45
American Dollar Exchange Rate