Intra-day update: rupee strengthens further against US dollar

The Pakistani rupee continued to appreciate against the US dollar, gaining another 0.37% during the opening hours of trading in the inter-bank market on Wednesday. At 10:10am, the rupee was hovering at 293.80, an increase of Rs1.10, in the inter-bank market. On Tuesday, the rupee had appreciated 0.36% to settle at 294.90. The rupee has been on an upward trajectory in recent days, strengthening after it hit a record low of 307.1 in the inter-bank market. The change in fortune comes as State Bank of Pakistan (SBP) introduced structural reforms in the Exchange Companies’ (ECs) sector and authorities reportedly initiated crackdown on smuggling, lending support to the currency markets. Internationally, the US dollar remained firm on Wednesday but softened slightly against the yen ahead of a much-anticipated rate decision by the Federal Reserve later in the day. The US dollar index, which measures the greenback against a basket of rivals, stayed mostly flat at 105.13 as traders awaited the Fed’s rate decision. Markets expect the Fed will almost certainly keep rates on hold at 5.25% to 5.50%, putting the focus on the central bank’s forward guidance. Oil prices, a key indicator of currency parity, retreated further from 10-month highs on Wednesday ahead of the US Federal Reserve’s interest rate decision, with investors uncertain when peak rates will be hit and how much of an impact it will have on energy demand. Prices fell despite a bigger-than-expected draw in US oil stockpiles and weak US shale output that indicated tight crude supply for the rest of 2023. This is an intra-day update