The Pakistani rupee saw a slight gain against the US dollar in intra-day trading on Friday, appreciating by 0.08% in the inter-bank market during the early hours of the session. By 11 am, the rupee had gained Re0.22, trading at 279.5 against the greenback, up from Thursday’s closing rate of 279.72. While the movement was marginal, it marked a small victory for the local currency as it continues to navigate ongoing challenges in the global financial landscape.
Despite this improvement, the US dollar remains a focal point of international attention, driven by global uncertainties. On Friday, the greenback experienced a surge in demand as a safe-haven currency, spurred by growing concerns over potential US President Donald Trump’s impending tariffs. However, the dollar was still on track for a monthly loss, as traders balanced concerns about the US economy with looming tariff threats. The US dollar index, which measures the strength of the greenback against a basket of major currencies, stood at 107.24, after rising nearly 0.9% on Thursday. However, the index was poised to register a monthly decline of 1.1%, marking its worst performance since August. This downward pressure on the US dollar has been fueled by growing fears surrounding the health of the US economy and a softening economic outlook.
The primary factors contributing to this shift include weaker-than-expected economic data, which has led to increased speculation that the Federal Reserve may implement more rate cuts later this year. As a result, US Treasury yields have fallen, contributing to the US dollar’s decline. Lower yields reduce the appeal of US assets, leading to a decrease in demand for the dollar. This market sentiment has impacted the dollar’s performance across global markets, including in Pakistan.
On the commodity front, oil prices, which are closely linked to currency parity, also softened on Friday. Global oil prices were poised for their first monthly decline since November, reflecting broader uncertainties about the global economic climate. Concerns about fuel demand, exacerbated by fears of a slowdown in the US economy and Washington’s tariff threats, have outweighed concerns about supply disruptions. By early morning on Friday, Brent crude futures for May delivery had dropped by 31 cents, or 0.4%, to $73.26 a barrel. Meanwhile, US West Texas Intermediate (WTI) crude futures were trading at $70.04 per barrel, also down 31 cents, or 0.4%. These declines in oil prices are expected to weigh on the broader global market outlook, further impacting currency markets worldwide.
Despite these global developments, the Pakistani rupee managed to see a modest improvement against the US dollar. As the US dollar continues to face downward pressure due to a range of economic factors, local currency movements remain volatile. Traders and investors will continue to closely monitor both global and domestic developments, especially the direction of oil prices, US Federal Reserve policies, and any geopolitical shifts that may influence the value of the dollar and impact the exchange rate in Pakistan.
As of now, the rupee’s performance in the inter-bank market remains a subject of scrutiny, with experts suggesting that any continued gains or losses could largely depend on the unfolding dynamics of the US economy and global financial conditions.