The Pakistani rupee improved against the US dollar, appreciating 0.01% in the inter-bank market on Friday.
At close, the currency settled at 281.17, a gain of Re0.03 against the greenback.
On Thursday, the local unit closed at 281.20.
Internationally, the Japanese yen was set for its steepest weekly drop in a year on Friday, as investors fretted about the fast-receding chances of another rate hike this year. Comments from Japan’s likely next prime minister failed to soothe market jitters.
The yen was last steady at 153.12 per US dollar in early Asian hours, hovering near its weakest level since mid-February. The Japanese currency is on pace for a nearly 4% drop in the week, its biggest decline since early October last year.
The yen’s drastic drop has been centred on worries that the Bank of Japan may not hike interest rates again this year after fiscal dove Sanae Takaichi’s surprise victory, stoking worries of Japanese authorities needing to step in.
The euro last fetched $1.15635, anchored near two-month lows hit on Thursday and on pace for a 1.5% drop for the week, its sharpest decline in 11 months as the political turmoil in France weighed on the single currency.
That has left the dollar upbeat, with the dollar index, which measures the US currency against six other units, at 99.4, near a two-month high. The index is on course for a 1.7% gain, its biggest jump in a year.
According to the CME Group’s Fedwatch Tool, traders are pricing in a 95% chance that the Federal Reserve cuts rates by 25 bps at its October meeting. In the past week, the odds of an additional cut in December have dropped to 80% from 90%.
Oil prices, a key indicator of currency parity, declined slightly on Friday after settling 1.6% lower in the previous session as the market’s risk premium faded after Israel and Hamas agreed to the first phase of a plan to end the war in Gaza.
Brent crude futures were down 7 cents at $65.15 a barrel by 0338 GMT.
