Pakistani Rupee Inches Up as US Dollar Slumps Amid Global Market Volatility
The Pakistani rupee gained marginal ground against the US dollar on Friday, appreciating by 0.03% in the interbank market.
At market close, the rupee settled at PKR 280.47 per USD, up by Re0.09 compared to the previous day’s closing rate of PKR 280.56.
🌍 Global Factors Weigh on US Dollar
The modest appreciation in the rupee mirrors broader global movements, as the US dollar weakened sharply across international markets.
Key triggers included:
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Diminishing confidence in the US economy
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Investor flight to safe-haven assets such as the Swiss franc, Japanese yen, and euro
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Record highs for gold, which surged as a preferred hedge against uncertainty
The dollar plunged 1.2% to 0.81405 Swiss franc, marking its lowest level since January 2015. This extended Thursday’s sharp decline of nearly 4%, reflecting a broad loss of investor confidence in US assets.
🏛️ Market Confusion Over US Trade Policy
Investors were rattled by a dramatic turnaround in sentiment after President Donald Trump paused tariff hikes on several trading partners on Wednesday — only to see markets reverse course again within 24 hours.
This on-again, off-again approach to trade policy has:
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Baffled global leaders
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Created forecasting difficulties for businesses
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Led to massive outflows from Wall Street
Meanwhile, 10-year US Treasury yields are on track for their largest weekly jump since 2001, signaling heightened risk aversion and a major selloff in long-dated bonds.
🛢️ Oil Prices Recover, But Weekly Losses Loom
Oil prices, which heavily influence currency markets, rebounded slightly on Friday. However, both Brent and WTI benchmarks are set to record weekly losses, driven by persistent fears over a prolonged US-China trade war.
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Brent crude rose $0.90 (1.4%) to $64.23 per barrel
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WTI crude rose $0.88 (1.5%) to $60.95 per barrel
Despite the daily uptick, Brent is set to fall 2.1% this week, while WTI is likely to drop 1.8%, following 11% declines last week.
📊 What This Means for the Rupee
The slight recovery of the Pakistani rupee comes as:
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Global risk sentiment shifts away from the US dollar
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Demand for oil, Pakistan’s largest import, fluctuates
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Market participants weigh regional stability and international liquidity
While the gains are modest, they reflect renewed short-term support for PKR, bolstered by improved remittance flows and a stable interbank market.
Final Thoughts
As volatility continues to grip global markets, the outlook for emerging currencies like the Pakistani rupee remains closely tied to international macroeconomic trends, commodity prices, and central bank policies. Investors and businesses should stay alert to currency risks, especially amid trade war uncertainties and evolving geopolitical developments.
