The Pakistani rupee edged higher against the US dollar in early interbank trade on Thursday, continuing its recent pattern of mild gains.
By around 10am, the local currency was trading at 280.10 to the dollar, up Re0.17 from the previous close. This marked an appreciation of about 0.06 percent during the opening minutes of trading. On Wednesday, the rupee had settled at 280.27.
So far in the current fiscal year, the rupee has gained Rs3.49 against the dollar, an improvement of around 1.25 percent. However, on a calendar year basis, it remains weaker by Rs1.72, or about 0.61 percent.
Dollar firm globally ahead of central bank meetings
In international markets, the US dollar held on to its gains as investors positioned themselves ahead of major central bank decisions in the UK, Europe and Japan.
Sterling stayed under pressure after an unexpected drop in UK inflation strengthened expectations that the Bank of England could cut interest rates. Markets have priced in an almost 100 percent chance of a quarter-point cut following the weak November inflation data.
The Japanese yen recovered some ground after losses in the previous session, as the Bank of Japan began a two-day policy meeting. The central bank is expected to raise interest rates to their highest level in nearly three decades.
The dollar index, which tracks the greenback against a basket of major currencies including the yen and the euro, was little changed at 98.35 after rising 0.2 percent a day earlier. The yen gained about 0.2 percent to trade near 155.45 per dollar, while the euro hovered around $1.1743.
Sterling was also flat at $1.3373 after falling 0.4 percent on Wednesday. The European Central Bank is widely expected to keep rates unchanged at its meeting later in the day.
How the rupee performed on Wednesday
In Wednesday’s interbank session, the rupee had strengthened by 3.73 paisa to close at 280.27 per dollar, compared with 280.31 a day earlier. During the session, it moved between an intraday high of 280.4 and a low of 281.35.
In the open market, exchange companies quoted the dollar at around 280.50 for buying and 281.35 for selling.
Against other major currencies, the rupee showed mixed performance. It slipped slightly against the Saudi riyal to 74.71 but gained marginally against the UAE dirham to close at 76.31.
The local unit also posted notable gains against European currencies. It strengthened by Rs1.35 against the British pound to 373.24 and rose by about 67 paisa against the euro to finish at 328.12.
However, the rupee edged lower against the Chinese yuan, closing at 39.78. It also recorded gains against the Swiss franc, ending at 350.93, and improved against the Japanese yen, closing at 1.8015.
Market participants are now watching global central bank signals closely, as shifts in interest rate expectations continue to shape currency movements both at home and abroad.
