The Pakistani rupee posted marginal improvement against the US dollar, appreciating 0.05% during the opening hours of trading in the interbank market on Friday.
At 11am, the local currency was hovering at 283.53, a gain of Re0.14 against the greenback.
On Thursday, the rupee settled at 283.67.
Globally, the US dollar wobbled on Friday, hovering near its lowest level in 3-1/2 years against the euro and sterling, as traders wagered on deeper US rate cuts while awaiting trade deals ahead of a July deadline for President Donald Trump’s tariffs.
With the geopolitical tremors of the Israel-Iran conflict in the rear view after a ceasefire that appeared to be holding, market focus this week has been on US monetary policy.
The prospect of Trump announcing the next Federal Reserve chair, expected to be more dovish, earlier than usual to undermine the current Chair Jerome Powell, has raised the odds of the central bank cutting rates.
Powell, whose term ends in May, was also interpreted as being more dovish this week in testimony to US Congress, adding to expectations of more rate cuts. Traders are now pricing in 64 basis points (bps) of easing this year versus 46 bps expected on Friday.
Trump has not decided on a replacement for Powell, and a decision is not imminent, a person familiar with the White House’s deliberations told Reuters on Thursday.
Trump has repeatedly attacked Powell and called for rate cuts this year, stoking investor worries about the slow erosion of the US central bank’s independence and credibility.
The dollar index, which measures the US unit versus six other currencies, was lingering near its lowest since March 2022 at 97.398, on course for a 2% decline in June, its sixth straight month in the red.
Oil prices, a key indicator of currency parity, headed for their steepest weekly decline since March 2023 on Friday, as the absence of significant supply disruption from the Iran-Israel conflict saw any risk premium evaporate.
Brent crude futures rose 35 cents, or 0.52%, to $68.08 a barrel by 0429 GMT while US West Texas Intermediate crude gained 40 cents, or 0.61%, to $65.64. That put both contracts on course for a weekly fall of about 12%.
The benchmarks are now back at the levels they were at before Israel began the conflict by firing missiles at Iranian military and nuclear targets on June 13.
This is an intra-day update
