March 28, 2025 (MLN): The Pakistani rupee showed signs of strength against the US dollar in the inter-bank market on Friday morning, appreciating by 0.08% during the opening hours of trading. At 9:50 AM, the rupee was valued at Rs280 against the US dollar, reflecting a modest gain of Re0.22 compared to the previous day’s closing value of Rs280.22.
This uptick in the rupee’s value comes after a period of relative stability, with the currency showing resilience despite global economic challenges. On Thursday, the rupee closed slightly weaker at Rs280.22, suggesting that Friday’s improvement could signal a potential stabilization in the local currency, at least in the short term.
Internationally, the US dollar appeared to be on track for a steady week, though it was poised for a quarterly loss next week. The dollar’s decline has been fueled by ongoing concerns surrounding tariffs and their potential to slow down US economic growth. These concerns have driven down US yields, weakened stock markets, and applied downward pressure on the dollar. This shift is being watched closely by global markets, including Pakistan, where the US dollar’s value plays a crucial role in the currency exchange dynamics.
The euro has been one of the main beneficiaries of this trend, trading just below $1.08. It was set to post its largest quarterly rise in more than a year, up by more than 4% since the beginning of 2025. This appreciation can be attributed to a combination of factors, including positive developments surrounding peace prospects in Ukraine, the weakness of the US dollar, and a sharp rise in benchmark German yields. As a result, the euro has gained traction in global markets, creating additional pressures on the US dollar.
In the Asian market, the Japanese yen also saw marginal strength, poised for a quarterly gain of just under 4%, trading at 151.19 per dollar. This slight increase comes despite inflation concerns in Tokyo, with the yen remaining relatively unfazed by the uptick in consumer price index (CPI) readings.
Later on Friday, investors and traders were anticipating preliminary inflation data from France and Spain, as well as the release of the US core PCE inflation figures for February. The core PCE index, which is closely watched by the Federal Reserve, is expected to show a 0.3% month-on-month rise, according to economists polled by Reuters. Any softness in this figure could exert additional downward pressure on the US dollar and potentially influence the direction of US interest rates in the coming months.
Despite these mixed global dynamics, traders are keeping a close watch on US President Donald Trump’s pledge to introduce sweeping new tariffs next week, which has created unease in markets. Trump has already announced that a 25% tariff on imported cars will take effect on April 3, a move that could escalate trade tensions and further impact the US dollar’s strength.
Meanwhile, oil prices—a key factor influencing currency parity—remained near one-month highs on Friday, buoyed by a tightening global supply outlook. Oil prices were set to gain for a third consecutive week, driven by recent US sanctions on countries buying oil and gas from Venezuela, as well as restrictions on Iranian oil trade. As of the latest data, Brent crude futures were slightly lower, dipping 8 cents, or 0.1%, to $73.95 per barrel, while US West Texas Intermediate crude futures also fell by 0.1% to $69.84 per barrel.
Despite these minor declines, oil prices have already risen by more than 2% for the week, further supporting the rupee’s performance against the US dollar, as oil is a key factor in determining the exchange rates for currencies like Pakistan’s.
In conclusion, the Pakistani rupee’s modest strength against the US dollar on Friday morning reflects a positive trend for the currency, even as global economic factors such as trade tensions, inflation data, and oil prices continue to shape currency exchange markets worldwide.