The Pakistani rupee showed minimal movement against the US dollar during early trading hours on Friday, maintaining a stable position amid a mix of domestic calm and global market fluctuations. As of 10:00 AM, the rupee appreciated marginally by Re0.02, trading at 281.50 in the inter-bank market compared to Thursday’s closing rate of 281.52. The 0.01% gain reflects a quiet yet steady market performance with no immediate pressure on the local currency.
The rupee’s intra-day stability comes after a week of relatively moderate volatility, supported by a lack of disruptive local developments and a measured performance by global currencies. Despite regional geopolitical uncertainties and concerns over remittance and trade flows, the local unit appears to be benefitting from controlled market expectations and careful monetary management.
Internationally, the US dollar moved toward a weekly gain against major peers, influenced by shifts in investor sentiment following developments in global trade and central bank policy signals. Market optimism was bolstered by the announcement of a limited trade agreement between the United States and the United Kingdom, which investors viewed as a possible prelude to broader trade progress, including the upcoming US-China trade talks set to commence in Switzerland this weekend.
The strength of the US dollar comes as expectations of imminent interest rate cuts in the United States softened. The Federal Reserve signaled that it remains in no rush to reduce interest rates, which helped buoy the dollar against other major currencies.
The euro held steady during Friday’s Asian trading session, ending the week with a 0.6% decline, currently priced at $1.1217. Meanwhile, the Japanese yen weakened by about 0.7% over the week, touching a one-month low of 146.18 per dollar before recovering slightly to 145.78.
The British pound, which saw an initial uptick on reports of a US-UK trade agreement, retreated after the details of the deal were deemed limited in scope. Sterling dropped to a three-week low of $1.3220 in early trading. The agreement, while significant in signaling intent, only modestly expands agricultural market access and reduces certain tariffs but maintains a 10% duty on UK vehicle exports to the United States.
Global oil prices, a key external factor influencing currency markets in oil-importing countries like Pakistan, remained relatively stable after a notable rise in the previous session. Brent crude saw a minor uptick of $0.07, trading at $62.91 per barrel, while West Texas Intermediate (WTI) also increased by $0.07 to reach $59.98 per barrel. The gains followed signs of easing trade tensions between the US and China, combined with the announcement of the UK-US trade accord.
For Pakistan, the steady oil prices offer some cushion against external inflationary pressures, while a stable rupee contributes to a more predictable economic environment. Market analysts suggest that barring any unexpected developments in global commodity markets or geopolitical tensions, the rupee may continue to hover within a narrow band in the coming days.
As the global financial landscape continues to evolve, particularly with the focus shifting to US-China negotiations, local currency performance will remain closely tied to external economic signals and central bank responses.