Pakistani Rupee Experiences Slight Dip Against US Dollar

The Pakistani rupee underwent a slight decrease against the US dollar, falling by 0.02% in the interbank market on Friday.

At the market’s close, the rupee concluded trading at 283.72, reflecting a loss of approximately Re0.05 against the US currency.

The previous day, Thursday, saw the rupee closing at 283.67.

Global Market Influences

On the international stage, the US dollar exhibited some instability on Friday, hovering near its lowest mark in three and a half years against both the euro and sterling. This behavior comes as traders anticipate more significant US rate cuts, while also keeping an eye on potential trade agreements ahead of a deadline in July for tariffs imposed by President Donald Trump.

Following the apparent calming of geopolitical tensions related to the Israel-Iran situation due to a ceasefire, market focus has largely shifted to US monetary policy this week.

The possibility of Trump announcing his nominee for the next Federal Reserve chair, who is expected to adopt a more dovish stance, ahead of schedule to potentially undermine the current Chair Jerome Powell, has boosted expectations of rate cuts by the central bank.

Powell’s recent testimony to the US Congress was interpreted as leaning towards a more dovish approach, further fueling expectations of additional rate cuts. Market participants are currently factoring in around 64 basis points (bps) of easing this year, a notable increase from the 46 bps that were anticipated the previous Friday.

According to a source familiar with internal discussions at the White House, Trump has not yet made a final determination regarding Powell’s replacement, and a decision is not expected in the immediate future.

Trump has been openly critical of Powell on multiple occasions and advocated for rate cuts throughout the year, which has raised concerns among investors about the gradual weakening of the US central bank’s autonomy and reputation.

The dollar index, which serves as a measure of the US dollar’s value against six other major currencies, remained close to its lowest point since March 2022, registering at 97.398. This puts it on track for a 2% decline in June, marking its sixth consecutive month of losses.

Oil Prices Decline

Oil prices, which are closely monitored as an indicator of currency parity, were heading towards their largest weekly decline since March 2023 on Friday. The absence of any major supply disruptions resulting from the Iran-Israel situation led to the dissipation of any risk premium.

Brent crude futures saw an increase of 35 cents, or 0.52%, reaching $68.08 a barrel by 0429 GMT, while U.S. West Texas Intermediate crude experienced a gain of 40 cents, or 0.61%, to settle at $65.64. Both contracts are positioned for a weekly decrease of approximately 12%.

The benchmarks have now returned to levels seen prior to the onset of the conflict when Isreal launched missiles at Iranian military and nuclear sites on June 13.