PKR strengthens further against USD in intraday trade

KARACHI: The Pakistani rupee (PKR) extended its upward momentum against the US dollar (USD) in early trading on Monday, driven by a mix of domestic stability and global cues that weighed on the greenback. The local currency appreciated by 0.09 percent during the opening hours of the interbank session, rising 25 paisa to reach Rs282.47 against the greenback.

The rupee’s modest gain came amid broader weakness in the USD, which has been reeling from disappointing jobs data and fresh political uncertainty in Washington. A weaker-than-expected US employment report on Friday, followed by a surprise move by President Donald Trump to sack a key labour official, triggered speculation that the Federal Reserve may soon step in with more aggressive rate cuts.

The July jobs report revealed that employment growth in the US fell short of forecasts, while nonfarm payrolls for the previous two months were slashed by a hefty 258,000 jobs. This downward revision raised fresh concerns over the health of the US economy, putting pressure on the dollar and offering emerging market currencies like the rupee a brief window of strength.

Weekly and yearly trend remains encouraging

The PKR’s latest climb adds to the gains it made last week, when it closed Friday’s session at Rs282.72, up Re0.73 or 0.26 percent from the previous week’s close of Rs283.45, according to data from the State Bank of Pakistan (SBP).

So far in the current fiscal year, the rupee has appreciated by Rs1.05 or 0.37 percent against the dollar. However, on a calendar-year basis, it has still shed Rs4.17 or 1.47 percent since January, reflecting the broader challenges the currency has faced this year despite recent stabilisation.

Previous close and PKR’s performance against other currencies

The rupee’s strength was not limited to its performance against the dollar. It also made gains across a basket of major foreign currencies in Friday’s session. Against the British Pound, the rupee appreciated sharply by Rs2.05 or 0.55 percent to settle at Rs372.68. It also gained Rs1.04 or 0.32 percent against the Euro, closing at Rs322.69.

Similarly, the local unit rose by Rs1.40 or 0.40 percent against the Swiss Franc to close at Rs346.58. Against regional currencies, PKR added 11.97 paisa or 0.30 percent against the Chinese Yuan, ending at Rs39.21.

Other modest gains included a 4.27 paisa or 0.06 percent improvement against the Saudi Riyal to Rs75.37, and a 4.26 paisa or 0.06 percent increase versus the UAE Dirham to Rs76.97. The rupee also edged up by 1.51 paisa or 0.80 percent against the Japanese Yen, closing at Rs1.8772.

The intraday range in Friday’s interbank session remained relatively narrow, with the currency recording a bid high of Rs283 and an ask low of Rs285.5. Traders say all eyes will now be on upcoming US inflation data and signals from the Federal Reserve, which could determine the next leg of the rupee’s journey.

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