Rupee Gains Ground Against US Dollar in Inter-Bank Market

The Pakistani rupee extended its positive trajectory against the US dollar, appreciating by 0.01% in the inter-bank market on Wednesday.

At the market’s close, the rupee was recorded at 281.95, reflecting a gain of Re0.01. This marks the ninth successive rise of the rupee against the dollar.

The previous day, on Tuesday, the local currency concluded trading at 281.96.

On the global economic front, the US dollar strengthened for the third consecutive session on Wednesday. Market participants are keenly awaiting insights into monetary policy from the Federal Reserve’s Jackson Hole symposium scheduled for this week.

The New Zealand dollar experienced a sharp decline after the Reserve Bank indicated that a larger rate cut was considered when deciding on the quarter-point reduction.

The kiwi dollar fell as much as 0.9% to $0.5841, a level unseen since April 14.

The US dollar index, which gauges the dollar’s value against six major currencies, increased by 0.1% to reach 98.438, its highest mark since August 12. The index has risen by approximately 0.4% in the initial two days of the week.

The primary focus of the market is Federal Reserve Chair Jerome Powell’s address on Friday, with traders closely monitoring for any signals regarding a possible rate decrease in the coming month.

Currently, traders are assigning an 84% probability to such a rate cut and anticipating a reduction of around 54 basis points by the year’s end.

Oil prices, a significant indicator of currency valuation, remained relatively stable on Wednesday. Investors are awaiting further developments in discussions aimed at resolving the Russia-Ukraine conflict, which is impacting sanctions on Russian oil and the potential for further restrictions on its buyers.

Brent crude futures were trading at $65.90 a barrel, showing an increase of 11 cents as of 0405 GMT. US West Texas Intermediate crude futures for September delivery, which were set to expire on Wednesday, stood at $62.40 a barrel, up by 5 cents. The more active October contract was at $61.90 a barrel, marking a 13-cent increase.

On Tuesday, prices had decreased by over 1% due to growing optimism that a resolution to the conflict was nearing, potentially leading to the easing of sanctions on Russia and an increase in global supply.