The Pakistani rupee remained largely stable against the US dollar during early trading hours on Wednesday, maintaining its position amid global market movements and easing trade tensions.
At 10:30 AM, the rupee was trading at PKR 281.68 against the US dollar in the inter-bank market, marking a minor loss of just Re0.01 compared to Tuesday’s close of PKR 281.67.
Global Context: Dollar Weakens After US CPI Data
Internationally, the US dollar held steady following a sharp 0.8% decline on Tuesday, the most significant single-day drop in over three weeks. This came after US inflation data showed slower-than-expected growth, reinforcing the likelihood of Federal Reserve rate cuts in the near future.
The US Dollar Index, which tracks the greenback against a basket of six major currencies, stood flat at 100.94, stabilizing after a volatile start to the week. On Monday, the index had spiked by 1% amid hopes that easing Sino-US trade tensions would help stave off a global recession.
Trade Agreements Improve Sentiment
Global trade sentiment has improved in recent days. The US and China reached a 90-day tariff truce, and Washington also struck a trade agreement with Britain. Additionally, US President Donald Trump indicated progress toward potential trade deals with India, Japan, and South Korea, signaling a de-escalation of broader trade conflicts.
While US tariffs may drive a slight uptick in domestic inflation due to rising import costs, the overall outlook for global trade is now more optimistic.
Oil Prices Hold Near Highs
Oil prices, a key indicator for currency markets in oil-importing countries like Pakistan, remained close to two-week highs on Wednesday.
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Brent crude traded at $66.53 per barrel, down only $0.10
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WTI crude slipped $0.07 to $63.60
Both benchmarks had surged over 2.5% in the previous session, supported by the weakening dollar and positive trade news.
Outlook for the Rupee
The PKR’s stability reflects broader market confidence, helped by controlled import payments, stronger forex reserves, and recent financial discipline by authorities. However, future moves will likely depend on global commodity prices, especially oil, and upcoming macroeconomic data from the US.
