Rupee weakens further against US dollar

The Pakistani rupee registered a marginal decline against the US dollar, depreciating 0.07% in the inter-bank market on Thursday.

At close, the currency settled at 278.64, a loss of Re0.19 against the US dollar.

On Wednesday, the rupee had settled at 278.45 against the dollar, according to the State Bank of Pakistan (SBP).

In recent months, the domestic currency has largely been around 277-279 as traders keep an eye on approval from the International Monetary Fund’s (IMF) Executive Board over a new $7-billion Extended Fund Facility.

In a positive development, Moody’s Ratings upgraded the government of Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa2 from Caa3. It also said it expects IMF approval for Pakistan’s $7-billion Extended Fund Facility in a few weeks.

Globally, the US dollar steadied on Thursday as it nursed some of its steep losses from previous sessions, with traders looking ahead to a key U.S. inflation reading at the end of the week that could offer further clues on the outlook for rates there.

Friday’s release of the core personal consumption expenditures (PCE) price index – the Federal Reserve’s preferred measure of inflation – headlines a week that’s otherwise been lacking on major market moving data, leaving currencies mostly rangebound.

Still, the US dollar held to its overnight gains in early Asia trade on Thursday, after having risen 0.48% against a basket of major peers in the previous session. Analysts also attributed the rise to month-end demand.

Markets have fully priced in a 25-basis-point rate cut from the Fed next month, with a 34.5% chance of an outsized 50bp reduction, according to the CME FedWatch tool.

The greenback has fallen some 2.9% for the month thus far, putting it on track for its steepest monthly decline in nine months.

The US dollar index was last at 100.94, steadying from its fall to a 13-month low of 100.51 on Tuesday.

Oil prices, a key indicator of currency parity, steadied on Thursday, after two sessions of losses, as supply concerns over Libya returned to focus, while a smaller-than-expected draw in U.S. crude inventories sapped demand expectations.

Brent crude futures slipped 7 cents, or 0.09%, to $78.58 a barrel by 0812 GMT, while U.S. West Texas Intermediate crude futures edged 1 cent lower, or 0.01%, at $74.51.

Both contracts lost more than 1% on Wednesday, after data showed U.S. crude inventories dropped 846,000 barrels to 425.2 million last week, missing analyst expectations in a Reuters poll for a draw of 2.3 million.

Inter-bank market rates for dollar on Thursday

BID                            Rs 278.64

OFFER                      Rs 278.84

Open-market movement

In the open market, the PKR lost 2 paise for buying and remained unchanged for selling against USD, closing at 279.15 and 280.00, respectively.

Against Euro, the PKR gained 42 paise for buying and 67 paise for selling, closing at 308.92 and 310.67, respectively.

Against UAE Dirham, the PKR lost 1 paisa for buying and remained unchanged for selling, closing at 75.80 and 76.22, respectively.

Against Saudi Riyal, the PKR lost 2 paise for buying and remained unchanged for selling, closing at 74.05 and 74.42, respectively.

Open-market rates for dollar on Thursday

BID                            Rs 279.15

OFFER                      Rs 280.00