The Pakistani rupee experienced a minor decline, depreciating by 0.03% against the US dollar during the early hours of trading in the inter-bank market on Thursday. As of 10:20 am, the currency was hovering at 278.48, reflecting a loss of Re0.08 against the greenback. On Wednesday, the local unit had settled at 278.40 against the US dollar.
In recent weeks, the domestic currency has largely remained in the range of 277-279 against the dollar as Pakistan progresses with its plans to secure a more substantial International Monetary Fund (IMF) bailout programme.
Global Market Dynamics
Globally, the US dollar saw a slight decline on Thursday, with subdued movements ahead of a highly anticipated U.S. inflation report. Concurrently, sterling strengthened amid diminishing expectations for an August rate cut from the Bank of England (BoE). In the broader market, the dollar was generally on the back foot, with currencies trading mostly sideways as investors awaited the U.S. inflation data.
Against the greenback, the euro appreciated by 0.04% to $1.0834, while the Australian dollar edged up 0.01% to $0.6754. The dollar remained relatively stable at 104.95 against a basket of currencies. Market expectations suggest that core inflation in the US rose by 0.2% on a monthly basis in June, bringing the annual rate to 3.4%.
Oil Prices and Their Impact
Oil prices, a crucial indicator of currency parity, saw an uptick on Thursday due to a significant drop in crude stocks following increased processing by U.S. refineries and a reduction in gasoline inventories, indicating stronger demand. Brent futures climbed 35 cents, or 0.4%, to $85.43 a barrel, while U.S. West Texas Intermediate (WTI) crude increased by 36 cents, or 0.5%, to $82.47 a barrel.
U.S. crude inventories fell by 3.4 million barrels to 445.1 million barrels in the week ending July 5, far surpassing analysts’ expectations of a 1.3 million-barrel draw, according to a Reuters poll.
