US Dollar drops further against Pakistani rupee

KARACHI: The US dollar (USD) dropped further against the Pakistani rupee (PKR) as it closed at Rs296.85 in the interbank trading, ARY News reported quoting SBP.

Pakistani rupee (PKR) gained Rs1.11 against the US dollar in the interbank trading and closed at Rs296.85 as compared to the previous day’s rate, Rs297.97.

According to the forex dealers, the greenback is being traded at Rs298 in the open market, whereas, the banks traded the greenback to importers at Rs297.35.

Earlier today, the US Dollar (USD) was just below a six-month high in early European trading on Friday, having strengthened overnight following US economic data, while the yuan got a boost from better-than-expected Chinese data.

Markets were adjusting to a new outlook for central bank rate hikes after the European Central Bank on Thursday raised rates to a record high of 4% but signalled the hike was likely to be its last. Euro zone bond yields and the euro fell as investors bet the central bank would start cutting rates next year.

For currency markets, the focus is on the divergence between the ECB and U.S. Federal Reserve’s monetary policy plans, said Joel Kruger, a currency strategist at LMAX Group.

“If we’re heading to a place where there’s going to be continued pressure on the Fed to be needing to be thinking about higher interest rates while the other central banks are pricing in peak rates, then that would suggest that there is potential for more upside to the U.S. dollar,” he said.