KARACHI: The Pakistani rupee showed a slight uptick against the US dollar, gaining 0.05% in the initial hours of Thursday’s inter-bank trading session. By 10:20 am, the rupee was positioned at 281, marking a rise of Re0.13 in the inter-bank market.
Earlier, On Wednesday, the rupee experienced a slight uptick, settling at 281.13 against the US dollar. Meanwhile, the global market witnessed a stable US dollar, with traders eagerly awaiting US inflation data to validate speculations on potential rate cuts.
The US dollar has found stability in early 2024, rebounding from a decline in the latter months of 2023. This shift followed the Federal Reserve’s declaration of concluding rate hikes, and traders factored in substantial cuts.
Despite a modest adjustment in the pricing, futures indicate an anticipation of 140 basis points (bps) in cuts this year, with a 2/3 likelihood of initiation as early as March. This perspective may face challenges if inflation exceeds expectations.
New York Fed President John Williams emphasized on Wednesday that it is premature to advocate for rate cuts, highlighting the central bank’s ongoing efforts to bring inflation back to the 2% target. Projections suggest core inflation could decrease to 3.8% year on year for December, marking its slowest pace since early 2021.
