Intra-day update: rupee registers marginal improvement against US dollar

The Pakistani rupee saw a marginal improvement against the US dollar, appreciating 0.02% in the inter-bank market during the opening hours of trading on Thursday.

At 10:40am, the currency was hovering at 278.73 after a gain of Re0.04 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, rose for a second day on Thursday after a larger-than-expected decline in US crude oil stockpiles added to supply concerns stoked by US sanctions against Russian energy trade.

Brent crude futures rose 30 cents, or 0.4%, to $82.33 per barrel by 0120 GMT, after rising 2.6% to its highest since July 26 in the previous session. US West Texas Intermediate crude futures rose 32 cents, or 0.4%, to $80.36 a barrel after gaining 3.3% on Wednesday, reaching its highest since July 19.

Prices rose after the US Energy Information Administration reported on Wednesday domestic crude oil stocks fell for the seventh time in a row last week, the longest declining streak since July 2021.

This is an intra-day update