Rupee improves marginally, settles at 280.1 against US dollar

The rupee registered marginal gains against the US dollar on Wednesday, appreciating 0.05% in the inter-bank market.

As per the State Bank of Pakistan (SBP), the rupee closed at 280.1, a gain of Re0.15 against the greenback.

On Tuesday, the rupee registered a decline as it settled at 280.25 to the US dollar, according to the State Bank of Pakistan.

Globally, the US dollar index hovered at a one-month high against a basket of currencies on Wednesday as remarks by Federal Reserve Governor Christopher Waller dampened expectations for a March rate cut.

Market expectations of a rate cut in March have eased to a 62.2% chance versus an 76.9% view in the prior session, according to CME’s FedWatch Tool.

While the market’s latest pricing brings the Fed rate curve into more sensible territory, “with 157 basis points of rate cuts still priced in for 2024, there is room for this to ease back,” said Tony Sycamore, market analyst at IG.

The dollar index, a measure of the greenback against a basket of major currencies, last stood at 103.35 after climbing as high as 103.42 during the previous session, its highest level since Dec. 13.

Oil prices, a key indicator of currency parity,fell on Wednesday as economic growth in China, the world’s second-largest crude user, slightly missed expectations, raising concerns about future demand increases while US dollar strength dented investor’s risk appetite.

Global benchmark Brent crude futures fell 52 cents, or 0.7%, to $77.77 a barrel by 0432 GMT.

US West Texas Intermediate crude futures (WTI) fell 56 cents, or 0.8%, to $71.85 a barrel.

Brent crude rose slightly on Tuesday while WTI fell as investors saw fundamentals weakening in the US but the ongoing naval and air conflicts in the Red Sea increased concerns of tankers having to reroute to avoid the area, increasing costs and the amount of time for deliveries.

Inter-bank market rates for dollar on Wednesday

BID                            Rs 280.10

OFFER                      Rs 280.30

Open-market movement

In the open market, the PKR gained 29.00 paisa for buying and 19.00 paisa for selling against USD, closing at 278.27 and 280.73, respectively.

Against Euro, the PKR remained unchanged for both buying and selling, closing at 303.00 and 305.96, respectively.

Against UAE Dirham, the PKR lost 6.00 paisa for buying and 5.00 paisa for selling, closing at 76.00 and 76.74, respectively.

Against Saudi Riyal, the PKR lost 6.00 paisa for buying and 3.00 paisa for selling, closing at 74.24 and 74.90, respectively.

Open-market rates for dollar on Wednesday

BID                            Rs 278.27

OFFER                      Rs 280.73