The Pakistani rupee registered marginal improvement against the US dollar, appreciating 0.04% in the inter-bank market on Tuesday.
At close, the currency settled at 278.47 for a gain of Re0.10 against the greenback.
On Monday, the rupee had settled at 278.57, according to the State Bank of Pakistan (SBP).
Internationally, the US dollar was on the front foot on Tuesday as the prospect of higher-for-longer US interest rates remained top of investors’ minds, leaving other currencies struggling near milestone lows.
In a holiday-curtailed week, trading volumes are likely to thin out as the year-end approaches. The lack of major economic data releases also means the rates theme is likely to remain the main driver of moves in the foreign exchange market.
Against a basket of currencies, the US dollar was perched near a two-year peak of 108.54. It was last at 108.10.
While a benign US inflation reading on Friday eased some concerns about the pace of Fed cuts next year, markets are still pricing in just about 35 basis points worth of easing for 2025, in turn underpinning the dollar.
Oil prices, a key indicator of currency parity, rose on Tuesday, reversing the prior session’s losses, buoyed by a slightly positive market outlook for the short term, despite thin trade ahead of the Christmas holiday.
Brent crude futures were up 47 cents, or 0.7%, at $73.10 a barrel, and U.S. West Texas Intermediate crude futures rose 46 cents, also 0.7%, to $69.70 a barrel by 0955 GMT.
FGE analysts said they anticipated the benchmark prices would fluctuate around current levels in the short term “as activity in the paper markets decreases during the holiday season and market participants stay on the sidelines until they get a clearer view of 2024 and 2025 global oil balances.”
Supply and demand changes in December have been supportive of their current less-bearish view so far, the analysts said in a note.
American Dollar Exchange Rate