Tag: Currency Markets

The Pakistani rupee exhibited resilience against the US dollar in the inter-bank market, marking a 0.06 per cent gain on Wednesday, reaching a settlement of Rs281.72, reflecting an increase of Re0.17, as reported by the State Bank of Pakistan (SBP). 

This positive momentum follows a slight dip on Tuesday, when the rupee settled at Rs281.89 against the US dollar.

Meanwhile, on the international front, the US dollar experienced a broad ascent on Wednesday, hovering near a two-week high against major peers. 

This surge is attributed to various factors, including elevated US Treasury yields and a cautious shift in risk sentiment that impacted Wall Street.

In another significant development, the Federal Board of Revenue (FBR) is poised to implement stringent measures targeting non-filers during the current month. 

The initial phase involves the blocking of mobile SIM cards and mobile phones for non-filers, with the issuance of the Income Tax General Order expected by January 15. 

The FBR is also formulating a strategy to disconnect electricity and gas connections for non-filers, acknowledging a current lack of comprehensive data on the electricity connections of non-filers.

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The Pakistani rupee faced its eleventh consecutive session of losses against the US dollar, depreciating by 0.34 per cent in the inter-bank market on Monday.

According to the State Bank of Pakistan (SBP), the rupee settled at 285.29, marking a decline of Re0.98.

In the preceding week, the rupee had also suffered losses against the US dollar, closing 1.33 per cent lower at 284.31 in the inter-bank market, equivalent to a decrease of Rs3.74. This marked the third consecutive week of declines for the local currency.

Prior to this recent trend, the Pakistani rupee had maintained a positive trajectory for 28 consecutive sessions, one of the longest appreciation runs, gaining a cumulative 10.93 per cent since reaching a record low of 307.1 in the inter-bank market on September 5.

This surge was largely attributed to efforts to combat smuggling and increased controls on exchange companies.

However, the situation has since shifted in favour of the US dollar, with global currencies remaining stable on Monday but appearing poised to continue their recent uptrend. This comes as the US dollar retreated following a moderation in the Federal Reserve’s hawkish stance.

Internationally, major global currencies showed stability early on Monday, with the US dollar index flat at 105.11 and the euro at $1.0726.

The dollar index experienced its most significant decline since mid-July, falling over 1 per cent last week and reaching a six-week low.

Weakness in US job data, softer global manufacturing figures, and declining longer-term Treasury yields also contributed to the dollar’s weakened position.

The Pakistani rupee experienced a 0.16 per cent depreciation against the US dollar in the inter-bank market on Wednesday, settling at 279.88, marking a decrease of Re0.45, as reported by the State Bank of Pakistan (SBP).

The previous day, the rupee had depreciated by 0.11 per cent, closing at 279.43 against the US dollar. In a related development, the SBP anticipates an increase in remittances to Pakistan due to a notable rise in labour migration. 

In fiscal years 2022 and 2023, Pakistan observed a significant surge in labour migration compared to the preceding two years, with around 0.8 million Pakistani workers registered through the Bureau of Emigration and Overseas Employment (BEOE) and Overseas Employment Corporation (OEC) during FY23.

Internationally, the US dollar gained strength on Wednesday, supported by robust US economic data. Meanwhile, the euro faced challenges due to a dimming growth outlook in the Eurozone. US business output showed improvement in October, signalling a recovery from a five-month contraction, as reported on Tuesday. 

In contrast, data from the same day indicated an unexpected downturn in business activity in the Eurozone. The euro, against the dollar, was up 0.05 per cent at $1.0595 but had declined by 0.75 per cent the previous day. This shift boosted the dollar index, which steadied at 106.23, moving away from a one-month low of 105.35 recorded in the previous session.

Furthermore, oil prices remained above $88 on Wednesday, driven by concerns about escalating conflicts in the Middle East, which offset worries about reduced demand due to the gloomy economic prospects in Europe.

The Pakistani rupee continued to exhibit strength against the US dollar, marking a 0.36 per cent gain in the inter-bank market on Wednesday. Remarkably, this marks the rupee’s 16th consecutive appreciation against the greenback.

According to the State Bank of Pakistan (SBP), the rupee settled at Rs288.75, reflecting an increase of Rs1.05 in the inter-bank market. This follows a 0.37 per cent appreciation observed on Tuesday, settling at Rs289.80.

Over the past days, the rupee has consistently followed an upward trajectory, showcasing a remarkable recovery of over 6 per cent since reaching a historic low of Rs307.1 against the US dollar in the inter-bank market on September 5.

On the global stage, the US dollar maintained its robust position, trading near a 10-month high against major currencies on Wednesday. This situation is underpinned by the persistent elevation of Treasury yields, driven by expectations of sustained higher US interest rates. Concurrently, the yen faced challenges as it edged closer to a critical intervention threshold.

Recent statements from Federal Reserve officials have hinted at the possibility of further interest rate hikes, despite the central bank’s decision to hold rates steady the previous week. This has led to an ascent in US Treasury yields to levels not seen in several years, as financial markets recalibrate their expectations regarding the potential peak of US rates and the likelihood of a prolonged period of tight monetary conditions.

The US dollar index, a gauge of its strength, recently stood at 106.20, having reached a 10-month peak of 106.26 in the preceding session. Meanwhile, the euro remained subdued, hovering close to a six-month low and trading at approximately $1.0569.

The Pakistani rupee continued its upward trend against the US dollar, marking the 11th consecutive session of appreciation in the interbank market on Wednesday.

According to the State Bank of Pakistan (SBP), the rupee closed at 293.88, reflecting a 0.35 per cent increase. This follows a 0.36 per cent appreciation on Tuesday, when it settled at 294.90.

Recent days have seen a remarkable strengthening of the rupee, with a nearly 4.5 per cent gain since hitting a record low of 307.1 in the inter-bank market on September 5. 

This turnaround is attributed to structural reforms introduced by the State Bank of Pakistan (SBP) in the Exchange Companies’ (ECs) sector and reported efforts to combat smuggling, both of which have provided support to the currency markets.

Globally, the US dollar remained steady on Wednesday, with a slight softening against the yen, in anticipation of the Federal Reserve’s highly anticipated rate decision later in the day. 

The US dollar index, which gauges the greenback against a basket of currencies, held steady at 105.13 as traders awaited the Fed’s announcement. Market expectations are that the Fed will likely maintain interest rates in the range of 5.25 per cent to 5.50 per cent, putting the spotlight on the central bank’s forward guidance.

Meanwhile, oil prices, a significant indicator of currency stability, declined by nearly $1 on Wednesday, ahead of the US Federal Reserve’s interest rate decision. Investors remain uncertain about when peak interest rates will be reached and the potential impact on energy demand. 

These price drops occurred despite larger-than-expected reductions in US oil stockpiles and weaker US shale output, both of which point to limited crude supply for the remainder of 2023.

The Pakistani rupee displayed resilience against the US dollar, registering a noteworthy 0.43 per cent appreciation in the early hours of trading within the inter-bank market on Friday.

By 11:15 am, the rupee had reached a level of 296.68, marking a substantial increase of Rs1.28 in the inter-bank market.

In contrast, on the previous Wednesday, the rupee had demonstrated a 0.29 per cent appreciation, ultimately settling at 297.96.

Concurrently, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) opted to maintain the key policy rate at 22 per cent, anticipating a future decline in inflation.

This decision mirrors the MPC’s stance during the preceding meeting, indicating a consistent status quo in the policy rate despite market expectations of a potential rate hike.

Internationally, the US dollar maintained relative stability in the Asian market on Friday, slightly retreating from its recent gains against other currencies. This shift coincided with the strengthening of the yuan, driven by positive economic data from China.

The US dollar’s surge was driven by an unexpected increase of 0.6 per cent in August retail sales, surpassing the estimated 0.2 per cent rise. Additionally, market participants reacted to the European Central Bank’s 25-basis-point hike.

While the US dollar index currently stands at 105.32, marginally lower than Thursday’s six-month peak of 105.43, it still maintains its overall strength.

Furthermore, oil prices experienced an uptick on Friday, marking their third consecutive weekly gain. This rise was influenced by better-than-expected Chinese economic data and reports indicating record oil consumption, reinforcing the belief in continued high demand from the world’s second-largest crude consumer.