The Pakistani rupee strengthened against the US dollar, appreciating 0.09% during the opening hours of trading in the inter-bank market on Friday.

At 10:45am, the currency was hovering at 277.50, a gain of Re0.24 against the greenback.

On Thursday, the rupee had settled at 277.74, according to the State Bank of Pakistan (SBP).

Internationally, the US dollar was headed for its best week in more than a month on Friday, buoyed by expectations of fewer Federal Reserve rate cuts and the view that Donald Trump’s policies could further stoke inflation when he assumes office in January.

The greenback hovered near a one-year high against a basket of currencies at 106.88, eyeing a weekly gain of 1.8%, which would mark its best performance since September.

Fed Chair Jerome Powell said on Thursday the central bank does not need to rush to lower interest rates, citing ongoing economic growth, a solid job market and sticky inflation as reasons for caution against easing policy too quickly.

Traders reacted by paring bets of the pace and scale of future U.S. rate cuts, with Fed funds futures now implying just 71 basis points worth of easing by end-2025.

Pricing for a 25 bp rate cut next month has also fallen to just 48.3% from 82.5% a day ago, according to the CME FedWatch tool.

Oil prices, a key indicator of currency parity, edged down early on Friday as oversupply concerns and demand worries stemming from a stronger dollar outweighed a steep draw in U.S. fuel stocks.

Brent crude futures were down 30 cents, or 0.41%, at $72.26 a barrel by 0105 GMT. U.S. West Texas Intermediate crude futures were down 25 cents, or 0.36%, at $68.45.

For the week, Brent is set to fall about 2.2% while WTI is set to decline 2.7%.

US crude inventories last week rose by 2.1 million barrels, the Energy Information Administration (EIA) said on Thursday, much more than analysts’ expectations for a 750,000-barrel rise.

This is an intra-day update