In a noteworthy development, the Pakistani rupee showcased a marginal but significant improvement against the US dollar, underlining the dynamic nature of the foreign exchange landscape.
Market Movement Overview
At precisely 10 am, the Pakistani rupee demonstrated a commendable uptick, registering at 282.50 against the US dollar. This translated to a noteworthy increase of Re0.29. This positive shift follows a marginal gain observed on the preceding day when the rupee settled at 282.79 against its American counterpart.
Concerns in State Bank’s Reserves
While the rupee displayed resilience, there’s a parallel concern regarding the foreign exchange reserves held by the State Bank of Pakistan (SBP). The reserves, having dipped below $7 billion, reflect a $136 million decrease, primarily attributed to recent debt repayments during the week ending December 15, 2023.
Global Dynamics and the US Dollar
On an international scale, the US dollar is grappling near a more than four-month low, triggering anticipation ahead of a pivotal US inflation gauge reading scheduled for later in the day. This reading is expected to provide insights into the Federal Reserve’s considerations for potential interest rate adjustments in the coming year.
Recent performances of the US dollar include hitting a five-month trough against the New Zealand dollar and a three-week low against the euro during early Asia trade. These fluctuations followed a sudden bout of risk aversion in New York hours on Wednesday, prompting a selloff in US stocks and a corresponding rise in the dollar.
Looking Ahead: US Core PCE Print
Investor attention is now directed towards Friday’s US core personal consumption expenditures (PCE) print, recognized as the Fed’s preferred measure of underlying inflation. Analysts anticipate a modest rise, with the core PCE price index expected to have increased by 3.3% on an annual basis, a slight moderation compared to October’s 3.5%.