Exchange rates: PKR gains against USD in early session

The Pakistani rupee showed a mild upward move against the US dollar in early trading on Friday, ending the week on a steady note amid a broadly weaker greenback in global markets.

During the opening hours in the inter-bank market, the local currency appreciated 0.1 percent, trading around 280.55 against the dollar — up three paisa from Thursday’s close of 280.85.

Global market backdrop

The dollar slipped in early Asian trade as investors, deprived of official US jobs data due to the ongoing government shutdown, reacted to private surveys hinting at cracks in the American labour market. The dollar index, which measures the greenback against six major currencies, fell 0.5 percent to 99.67, reversing its early-month gains.

Traders are now betting heavily on a possible interest rate cut at the Federal Reserve’s next meeting on December 10. According to the CME Group’s FedWatch tool, the probability of a rate cut has climbed to 70 percent, compared to 62 percent a day earlier.

Against the Japanese yen, the dollar traded slightly higher at 153.17 yen after data showed Japan’s household spending in September rose 1.8 percent from a year earlier, missing expectations of a 2.5 percent rise.

PKR’s performance and outlook

So far in the current fiscal year, the rupee has gained Rs2.91 or 1.04 percent against the US dollar. However, it remains down by Rs2.30 or 0.82 percent since the start of the calendar year.

In Thursday’s inter-bank session, the rupee edged up by 1.05 paisa to close at 280.85 per dollar, according to the State Bank of Pakistan. In the open market, exchange companies quoted the greenback at 281.50 for buying and 281.90 for selling.

The rupee’s performance against other major currencies was mixed. It gained marginally against the UAE dirham and Saudi riyal, closing at 76.46 and 74.89 respectively. However, it lost ground against the euro, which rose to 323.36, and the British pound, which advanced to 366.94.

The PKR also weakened slightly against the Swiss franc and Chinese yuan, closing at 347.29 and 39.43 respectively, but firmed modestly against the Japanese yen to 1.8269.