The Pakistani rupee showed marginal strength against the US dollar during early trading hours on Wednesday, appreciating by 0.06% in the inter-bank market.
By 10:00 AM, the local currency was trading at Rs281.75, gaining Re0.17 from the previous close of Rs281.92 on Tuesday.
This modest recovery in the rupee comes amid broader global currency movements and rising geopolitical tensions.
Global Market Dynamics Impacting the Rupee
Internationally, the US dollar weakened for the third consecutive session, as political uncertainty and slowing trade deal momentum weighed on investor sentiment.
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The dollar slipped 0.14% against the Japanese yen, trading at 144.31, and fell 0.22% against the Swiss franc, reaching 0.8264.
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Investors remained cautious as US President Donald Trump failed to secure full Republican backing for his sweeping tax reform bill.
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Additionally, traders are closely monitoring the G7 finance ministers’ meetings in Canada, amid speculation that the US may be signaling a preference for a weaker dollar policy.
These developments, alongside fading momentum in trade negotiations with allies Japan and South Korea, have created uncertainty in the global forex landscape.
Oil Prices Climb Amid Geopolitical Concerns
Crude oil prices, a major external factor affecting Pakistan’s current account and currency stability, surged over 1% in early trading Wednesday.
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Brent futures rose by $0.86 (1.32%) to $66.24 per barrel.
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West Texas Intermediate (WTI) increased $0.90 (1.45%), trading at $62.93 per barrel.
This spike follows a CNN report that Israel is preparing a potential strike on Iranian nuclear facilities, escalating geopolitical concerns in the oil-rich Middle East.
Such developments could pressure Pakistan’s import bill and increase inflationary risks, though for now, the rupee is benefiting from global dollar softness.
Outlook
While the rupee’s appreciation is modest, it reflects short-term relief due to global currency adjustments and stronger oil demand. However, ongoing geopolitical tensions and budget-related fiscal uncertainty at home could still weigh on the rupee’s stability in the coming weeks.
Market participants will be watching both domestic economic indicators and international developments closely for cues on the rupee’s direction.
