The Pakistani rupee (PKR) showed a slight improvement against the US dollar on Friday, appreciating by 0.1% in the inter-bank market. At 10 a.m., the local currency was trading at 281.78 PKR per USD, marking a gain of Re0.28 compared to Thursday’s close of 282.06.
Global Factors Impacting the Dollar
The US dollar was generally soft on Friday, positioned to register its first weekly decline in five weeks against major currencies such as the euro and Japanese yen. This decline comes amid growing concerns over the United States’ fiscal health, which have prompted investors to seek safer assets.
The focus remains on the US’s massive $36 trillion debt and a recently passed, but contentious, tax bill pushed by President Donald Trump. The bill, described by Trump as a “big, beautiful bill,” has narrowly passed the Republican-controlled House of Representatives and is now set for a potentially lengthy debate in the Senate.
Market Movements and Indicators
The dollar index, which tracks the US dollar against six major currencies including the euro and yen, is poised to fall about 1.1% for the week, though it remained relatively steady at 99.829 during early Asian trading.
Despite this, US Treasury yields remained elevated, with the 30-year bond yield hovering above 5%, near a 19-month high and close to the October 2023 peak of 5.179%. A rise above this level would mark the highest yields since mid-2007.
Oil Prices and Currency Impact
Oil prices, a key factor influencing currency movements, slipped on Friday amid a stronger US dollar and expectations that OPEC+ may increase crude output.
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Brent crude futures fell by 37 cents to $64.07 per barrel.
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US West Texas Intermediate (WTI) crude futures declined by 39 cents to $60.81 per barrel.
For the week, Brent was down by 2%, while WTI dropped 2.7%.
Because oil is priced in US dollars globally, a stronger dollar makes oil more expensive for buyers using other currencies, often causing inverse price movements between the two.
