The Pakistani rupee saw a marginal decline against the US dollar, depreciating 0.04% in the inter-bank market on Tuesday.
At close, the currency settled at 278.27 for a loss of Re0.10 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, nudged lower on Tuesday as China’s economic data renewed demand concerns, while investors remained cautious ahead of the US Federal Reserve’s interest rate decision.
US West Texas Intermediate crude was down 11 cents at $70.60 a barrel at 0802 GMT, while Brent crude futures eased 2 cents to $73.89 a barrel.
Inter-bank market rates for dollar on Tuesday
BID Rs 278.27
OFFER Rs 278.47
Open-market movement
In the open market, the PKR remained unchanged for buying and lost 9 paise for selling against USD, closing at 277.35 and 279.23, respectively.
Against Euro, the PKR gained 41 paise for buying and 37 paise for selling, closing at 290.16 and 292.38, respectively.
Against UAE Dirham, the PKR gained 3 paise for buying and remained unchanged for selling, closing at 75.42 and 76.00, respectively.
Against Saudi Riyal, the PKR gained 2 paise for buying and remained unchanged for selling, closing at 73.71 and 74.25, respectively.
Open-market rates for dollar on Tuesday
BID Rs 277.35
OFFER Rs 279.23
American Dollar Exchange Rate