Rupee Extends Gains Against US Dollar in Early Trade

The Pakistani rupee continued its positive run against the US dollar in early trading on Friday, appreciating 0.13% in the inter-bank market. By 10:00 AM, the local currency was trading at 281.85, marking a gain of Rs0.37 from the previous close of 282.22 on Wednesday. Markets remained shut on Thursday in observance of the August 14 Independence Day holiday.

This consistent upward trend in the rupee’s value is largely attributed to improved market sentiment, supported by an ongoing crackdown on illegal currency dealers and smuggling operations.

Global Market Influence

On the global front, the US dollar retained most of its previous session gains after hotter-than-expected US Producer Price Index (PPI) data prompted traders to reassess the likelihood of a September interest rate cut by the US Federal Reserve. The data, which showed the fastest producer price growth in three years, underscored persistent inflationary pressures and complicated expectations for monetary easing.

Following the release, CME’s FedWatch tool indicated a slight dip in the odds of a 25-basis-point rate cut next month.

Major Currency Movements

Euro & Pound Sterling: Both currencies held steady after dropping 0.5% and 0.3% respectively on Thursday.
Japanese Yen: Gained 0.3% to trade at 147.395, buoyed by stronger-than-expected Q2 GDP data.

Oil Price Impact

Oil prices — a key factor influencing the rupee — edged higher to fresh one-week highs. This rise followed US President Donald Trump’s warning of “consequences” if Russia failed to agree to a Ukraine peace deal, sparking concerns over global supply.

Brent Crude: Up 0.2% to $67.00 per barrel.
WTI Crude: Gained 0.2% to $64.10 per barrel.

Strong Japanese economic data, along with steady demand prospects from major importers, also provided support to oil markets.

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Yasher Rizwan