Rupee Strengthens Against US Dollar in Early Trading

The Pakistani rupee continued its positive momentum against the US dollar, appreciating by 0.05% in the initial hours of inter-bank trading on Wednesday.

At approximately 10:15 am, the rupee was trading at 282.43, reflecting a gain of Re0.14.

The local currency had closed at 282.57 the previous day.

Global Market Overview

On the international stage, the US dollar experienced range-bound movement on Wednesday. Investors appeared hesitant, awaiting US President Donald Trump’s decision regarding a nominee to fill an upcoming vacancy on the Federal Reserve’s Board of Governors.

Trump had announced on Tuesday his intention to finalize the nomination by week’s end. He had also reportedly narrowed down the potential candidates to succeed Fed Chair Jerome Powell to a shortlist of four individuals.

Recent data revealed that US services sector activity remained unexpectedly stagnant in July, even as input costs surged to a near three-year high. This highlighted the impact of tariffs imposed by Trump on the economy, which had also begun to negatively affect corporate profits.

Nevertheless, these factors had limited influence on the dollar’s performance, as traders were cautious about establishing new positions prior to the announcement of the Fed board vacancy. Concerns have grown regarding the potential for political considerations to affect central bank policy.

The dollar remained relatively stable at 147.54 yen, while the euro experienced a slight increase of 0.02%, reaching $1.5760. The British pound was last valued at $1.3304.

The dollar index, which measures the dollar’s strength against a basket of currencies, stood at 98.76, still below its peak of 100.25 recorded on Friday before the release of nonfarm payrolls data.

Market participants continue to anticipate a high probability (over 90%) of a Federal Reserve rate cut in September, with expectations of approximately 58 basis points worth of easing by the end of the year.

Oil Prices Rise

Oil prices, a crucial indicator of currency valuations, increased on Wednesday, recovering from a five-week low reached the previous day. This rise was driven by concerns about potential supply disruptions following US President Donald Trump’s tariff threats against India due to its purchases of Russian crude oil.

Brent crude futures saw an increase of 29 cents, or 0.4%, reaching $67.93 per barrel by 0119 GMT. Meanwhile, US West Texas Intermediate crude traded at $65.44 per barrel, up 28 cents, or 0.4%.

Both benchmarks experienced declines of over $1 on Tuesday, settling at their lowest levels in five weeks. This marked the fourth consecutive session of losses, fueled by concerns about oversupply resulting from OPEC+’s planned output increase in September.

This information constitutes an intra-day market update.