The Pakistani rupee appreciated against the US dollar, gaining 0.04% during the opening hours of trading in the inter-bank market on Thursday.
At 10:30am, the rupee was hovering at 279.98, an increase of Re0.12, in the inter-bank market.
On Wednesday, the rupee registered a significant gain as it settled at 280.1 against the US dollar, according to the State Bank of Pakistan (SBP).
A number of positive economic developments on the local front occurred on Wednesday.
The United Arab Emirates (UAE) rolled over its $2 billion deposits with Pakistan for another one year to support the country’s foreign exchange reserves, while the International Monetary Fund (IMF) also released $ 705 million loan tranche to Pakistan, the SBP said.
Pakistan last week requested the UAE for the rollover of $ 2 billion deposits to avert depletion in foreign exchange reserves of the country.
Moreover, the country’s current account posted a surplus of $397 million in December, while foreign direct investment (FDI) surged by 35% in first half of FY24.
Globally, the US dollar held close to a one-month peak versus major peers on Thursday after robust US retail sales data overnight added to building expectations the Federal Reserve will not rush to lower interest rates.
The US dollar index, which measures the currency against a basket of six rivals, traded little changed at 103.36 in the Asian morning, after reaching 103.69 on Wednesday for the first time since Dec. 13.
Traders have trimmed the odds of a first Fed rate cut by March to 53.8%, down from 63.1% on Tuesday, according to CME’s FedWatch Tool.
The market is still pricing in a likely 150 basis points of cuts by the end of the year, even as Fed officials including Governor Christopher Waller this week pushed back against expectations of rapid policy loosening.
Oil prices, a key indicator of currency parity, edged higher on Thursday as OPEC forecast relatively strong growth in global oil demand over the next two years and a cold blast in the US disrupted some oil production.
Brent crude futures gained 28 cents to $78.16 a barrel by 0004 GMT, and US West Texas Intermediate crude futures (WTI) rose 34 cents at $72.90. OPEC, in a monthly report, said world oil demand will rise by a robust 1.85 million barrels per day (bpd) in 2025 to 106.21 million bpd.
This is an intra-day update
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