The Pakistani rupee reported a marginal decline against the US dollar, depreciating 0.04% in the inter-bank market on Thursday.
At close, the currency settled at 278.97 for a loss of Re0.1 against the greenback, according to the State Bank of Pakistan (SBP).
The rupee had closed at 278.87 on Wednesday.
Internationally, the US dollar bulls were ready to pounce on the euro on Thursday should the European Central Bank sound dovish on rates later in the day, given the Federal Reserve had pressed the pause button on its easing cycle overnight.
Markets are more than fully priced for the ECB to trim rates by 25 basis points to 2.75% later on Thursday, with even a small chance of 50 basis points given how weak the EU economy is.
This is one reason markets are priced for further cuts in March, April and June, with about 90 basis points of easing implied for 2025.
Were ECB President Christine Lagarde to affirm such a dovish outlook, it could pile fresh pressure on the euro.
The single currency was trading flat at $1.0425, having found support around $1.0380 overnight.
The dollar was down a fraction both against the yen at 155.01 and on a basket of currencies at 107.880.
It had briefly popped higher overnight when the Fed kept rates steady as expected but dropped a reference to making “progress” on inflation, which was taken as hawkish.
Yet, Chair Jerome Powell used his media conference to say progress was still being made and rates were “meaningfully” above neutral, implying there was still plenty of scope to cut.
As a result, Treasury yields rose at first but soon rallied back to flat with the 10-year at 4.534%. Fed fund futures pared losses to imply around 47 basis points of easing this year, compared to 49 basis points a day earlier.
Oil prices, a key indicator of currency parity, slipped for a second day on Thursday after US crude stockpiles rose more than expected, though attention remained on tariffs threatened by US President Donald Trump on Mexico and Canada, the two largest suppliers of crude to the United States.
Brent crude futures were down 43 cents, or 0.6%, at $76.15 a barrel at 1007 GMT.
US crude futures were down 46 cents, also 0.6%, to $72.16.
US crude futures had settled at their lowest price this year on Wednesday.
Inter-bank market rates for dollar on Thursday
BID Rs 278.97
OFFER Rs 279.17
Open-market movement
In the open market, the PKR lost 10 paise for buying and remained unchanged for selling against USD, closing at 278.84 and 280.82, respectively.
Against Euro, the PKR gained 7 paise for buying and 30 paise for selling, closing at 289.84 and 292.90, respectively.
Against UAE Dirham, the PKR lost 1 paisa for buying and remained unchanged for selling, closing at 75.99 and 76.50, respectively.
Against Saudi Riyal, the PKR lost 3 paise for buying and remained unchanged for selling, closing at 74.28 and 74.75, respectively.
Open-market rates for dollar on Thursday
BID Rs 278.84
OFFER Rs 280.82