Intra-day update: rupee marginally improves against US dollar

The Pakistani rupee registered some gain against the US dollar, appreciating 0.08% during the opening hour of trading in the inter-bank market on Wednesday.

At 10:20am, the rupee was hovering at 279.06, a gain of Re0.22 against the greenback.

On Tuesday, the rupee registered a marginal decline to settle at 279.28 against the US dollar, according to the SBP.

In a key development, Moody’s Investors Service, a global credit rating agency, on Tuesday said Pakistan’s credit rating “would likely be upgraded” if its government’s “liquidity and external vulnerability risks decreased materially and durably”.

The rating agency, in its announcement of the periodic review, also maintained Pakistan’s credit rating unchanged at ‘Caa3’ for long-term issuer rating, with a stable outlook.

“Pakistan’s credit profile reflects the government’s very high liquidity and external vulnerability risks as the very low levels of foreign exchange reserves remain well below what is required to meet its very high external financing needs over the near to medium term,” Moody’s said.

Internationally, the US dollar held steady as traders brushed off durable goods data overnight and awaited the Federal Reserve’s preferred measure of inflation due Thursday for clues on when the US central bank may start cutting interest rates.

In the US, the Commerce Department’s Census Bureau said orders for durable goods fell 6.1% last month, exceeding the 4.5% decline forecast by economists polled by Reuters.

The data did not seem to faze the market, with all eyes on the US core personal consumption expenditures (PCE) price index due on Thursday.

Forecasts are for a rise of 0.4%.

Oil prices, a key indicator of currency parity, pulled back in Asia on Wednesday as the prospect of a delay in the US rate-cutting cycle and a rise in US crude stocks offset a boost on Tuesday from news OPEC+ might extend its output cuts.

Brent crude futures fell 30 cents, or 0.36%, to $83.35 a barrel by 0302 GMT, while US West Texas Intermediate futures (WTI) dropped 28 cents to $78.59 a barrel.

On Tuesday, Federal Reserve Governor Michelle Bowman signalled she is in no rush to cut US interest rates, particularly given upside risks to inflation that could stall progress on controlling price pressures or even lead to their resurgence.