Rupee records marginal decline against US dollar

The Pakistani rupee recorded a marginal decline against the US dollar, depreciating 0.03% in the inter-bank market on Thursday.

At close, the currency settled at 278.86 after a loss of Re0.09 against the greenback.

The rupee closed at 278.77 on Wednesday, according to the State Bank of Pakistan (SBP).

Internationally, the US dollar slipped on Thursday to stand just off recent peaks as cooling US inflation data knocked down bond yields, while the yen hit a one-month high on rising bets on a rate hike in Japan.

The yen was the biggest major mover on the dollar overnight, rising about 1% and extending gains in Asia, as inflation relief in the US raised chances of Federal Reserve rate cuts and coincided with murmurs of a Bank of Japan hike next week.

The yen traded as firm as 155.21 per US dollar, its strongest since December 19.

The greenback also handed back some recent gains against the Australian and New Zealand dollars.

The dollar index was heading lower for a fourth straight session on Thursday, easing slightly to 109.02.

Traders who have been growing worried about inflation responded with relief, buying stocks and sending benchmark 10-year Treasury yields down more than 13 basis points, although the currency market reaction was a bit more muted.

The dollar index remains 0.5% firmer in January and, if sustained, would notch four consecutive monthly gains. Markets priced in about an extra 10 bps of Federal Reserve easing this year after the inflation data, reckoning on 37 bps of cuts.

Oil prices, a key indicator of currency parity, gained for a second session on Thursday, supported by worries over potential supply disruptions amid US sanctions on Russia, a larger-than-forecast fall in US crude oil stocks, and an improving global demand outlook.

Brent crude futures rose 23 cents, or 0.3%, to $82.26 per barrel by 0731 GMT, after rising 2.6% in the previous session to their highest since July 26 last year.

US West Texas Intermediate crude futures rose 28 cents, or 0.4%, to $80.32 a barrel, after gaining 3.3% on Wednesday to their highest since July 19.