Rupee Strengthens Against US Dollar in Early Trading

The Pakistani rupee continued its positive trajectory against the US dollar, experiencing a 0.16% increase in value during the initial trading hours in the inter-bank market on Wednesday.

At approximately 10:00 am, the rupee was trading at 281.97, reflecting an appreciation of Re0.45.

On the preceding day, Tuesday, the rupee concluded trading at 282.42.

Global Factors Influencing Dollar’s Weakness

On the international stage, the US dollar exhibited weakness on Wednesday. This decline followed a moderate US inflation report, which amplified expectations of a potential rate cut by the Federal Reserve in the coming month. Additionally, the dollar was impacted by President Donald Trump’s endeavors to solidify his influence over US institutions.

Data released on Tuesday indicated a slight increase in US consumer prices for July, aligning with anticipated projections. The data also suggested that the impact of Trump’s extensive tariffs on goods prices has been minimal thus far.

Investors, anticipating imminent rate reductions by the Federal Reserve, responded positively to the data. They subsequently priced in a 98% likelihood of the central bank implementing an easing of rates in the upcoming month, which exerted downward pressure on the dollar’s value.

Against the Japanese yen, the dollar registered a 0.05% decrease, settling at 147.76. Meanwhile, the euro remained stable at $1.1676, following a 0.5% increase in the prior session.

The dollar index was last observed at 98.08, after a decline of roughly 0.5% on Tuesday.

US Treasury yields mirrored this trend, decreasing amid heightened expectations of a rate cut. The two-year yield was recently at 3.7371%, fluctuating within a range of nearly 10 basis points on Tuesday.

The benchmark 10-year yield showed minimal change, standing at 4.2965%.

Oil Prices Show Little Movement

Oil prices, a significant indicator for currency valuation, experienced minimal change on Wednesday. This followed a decline in the previous session, prompted by an industry report indicating an increase in US crude stockpiles last week, signaling the nearing conclusion of the peak summer demand period.

Brent crude futures rose by 3 cents to $66.15 a barrel at 0102 GMT, following a 0.8% decrease in the previous session. US West Texas Intermediate crude futures declined by 3 cents to $63.14, after a 1.2% reduction.

This is an intra-day update.