The Pakistani rupee experienced a modest appreciation against the US dollar, advancing by 0.03% in the inter-bank market on Friday. By the end of the trading day, the rupee settled at 278.51 per dollar, marking a gain of 0.08 rupees from the previous day’s close of 278.59, which had itself seen a slight increase of 0.02 rupees.
In recent weeks, the rupee has remained relatively stable, fluctuating within the range of 277 to 279 against the dollar. This stability comes as Pakistan continues its efforts to secure an expanded and extended bailout package from the International Monetary Fund (IMF).
Globally, the US dollar strengthened against other major currencies, driven by gains against the euro and increased safe-haven demand. This was partly due to political uncertainties in France, which called for a snap vote, raising concerns about the broader eurozone. On Friday, the broader currency market saw minimal movement against the slightly stronger dollar, with the British pound slipping 0.08% to $1.2752, although it was still on track for a weekly increase of 0.3%.
Data from the US showed an increase in initial unemployment claims to a ten-month high last week, while separate data indicated an unexpected drop in producer prices for May. These figures have led to speculation that the Federal Reserve might begin easing monetary policy by September. This comes after Wednesday’s inflation data, which revealed that consumer prices remained flat in May. Despite the Fed’s more hawkish tone at the conclusion of its policy meeting, projecting only one rate cut for 2024, investors focused on the weaker data, which boosted Wall Street to record highs and caused Treasury yields to fall.
Meanwhile, oil prices, a significant factor influencing currency exchange rates, remained stable on Friday. Brent crude futures fell slightly by 19 cents, or 0.23%, to $82.56 per barrel, while West Texas Intermediate (WTI) crude futures dropped 32 cents, or 0.41%, to $78.30. Despite these small declines, both benchmarks saw nearly a 4% increase over the week, supported by optimistic forecasts for crude oil and fuel demand.
