Rupee Inches Up as Global Dollar Retreats Following Moody’s Downgrade
The Pakistani rupee showed minor strength against the US dollar in early inter-bank market trading on Monday, appreciating by 0.01%. At 10:05am, the rupee was trading at 281.63 against the greenback, marking a gain of Re0.03.
This slight appreciation comes after a marginal weekly gain of Re0.05 or 0.02%, with the local currency closing at 281.66 last week versus 281.71 the week before, according to the State Bank of Pakistan (SBP).
Global Market Reaction to US Credit Downgrade
On the global front, the US dollar lost momentum after a four-week rally, following a surprising downgrade of the United States’ credit rating by Moody’s. The agency lowered the sovereign credit rating by one notch, expressing concern over America’s growing $36 trillion debt burden.
Despite the dollar’s 0.6% rise last week—driven by a temporary trade truce between the US and China—market sentiment weakened due to data indicating rising import prices and declining consumer confidence.
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The dollar dipped 0.3% to 145.22 yen.
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It also fell 0.2% against the Swiss franc, another safe-haven currency.
US Tariff Pressures and Fiscal Concerns
US Treasury Secretary Scott Bessent confirmed that President Trump intends to impose tariffs on trade partners who fail to negotiate in “good faith,” echoing past threats. Meanwhile, internal opposition continues to mount within the Republican Party against Trump’s sweeping tax cut bill, which analysts say could add $3 to $5 trillion to the national debt over the next decade.
Oil Prices Stable Amid Nuclear Talks and Trade Concerns
Oil prices remained largely unchanged as markets await the outcome of US-Iran nuclear discussions and key economic releases from China. These developments are critical for assessing the global commodities outlook, particularly in the wake of ongoing US-China trade tensions.
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Brent crude edged down 5 cents to $65.36 per barrel.
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West Texas Intermediate (WTI) crude rose 3 cents to $62.52 per barrel.
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The front-month June WTI contract expires Tuesday, while the more active July contract slipped 4 cents to $61.93.
Last week, both oil benchmarks climbed over 1% after the US and China agreed to a 90-day pause in tariff escalation.
