The Pakistani rupee appreciated by 0.1% against the US dollar during early trading hours in the inter-bank market on Thursday, gaining Re0.29 to trade at 281.43 per dollar at 10 AM. This followed the rupee’s close at 281.72 against the greenback on Wednesday.
The modest gain in the rupee comes amid a week of turbulent global currency movements influenced by easing US-China trade tensions and speculation about Washington seeking a weaker dollar as part of broader trade negotiations.
Internationally, the US dollar weakened as markets reacted to a recent tariff truce between the US and China, alongside reports of discussions between US and South Korean officials about the dollar/won exchange rate. The South Korean won surged 0.8% to 1,396.22 per dollar, continuing a rally this year despite last year’s 14% drop against the dollar.
This volatility reflects broader uncertainty in Asian currencies, with investor attention fixed on the implications of the US administration’s dollar policy. The Bloomberg report tempered some speculation about deliberate US efforts to weaken the dollar, but concerns remain that such policies may continue to support Asian currencies in the near term.
The dollar index, which tracks the US dollar against six major currencies, dipped 0.11% to 100.89 but is on track for a fourth consecutive week of gains.
Market participants are now focusing on upcoming US retail sales data and seeking clarity on trade deals following the announcement of a 90-day tariff pause between the US and China earlier this week. This announcement briefly lifted market sentiment.
Oil prices, closely linked to currency movements, declined amid hopes of a US-Iran nuclear agreement and an unexpected build in US crude inventories. Brent crude futures fell 2.3% to $64.60 a barrel, while US West Texas Intermediate crude slid 2.3% to $61.69, both benchmarks continuing losses from the previous session.
The fluctuating oil prices add another layer of complexity to currency markets globally, influencing trading sentiment and the outlook for emerging market currencies like the Pakistani rupee.
