LAHORE MIRROR – In early interbank trading on Thursday morning, the Pakistani rupee continued to depreciate against the US dollar, with the local currency losing Rs1.20.
This occurred despite the rising foreign reserves following Pakistan’s agreement with the International Monetary Fund (IMF). The dollar was traded for Rs285, up from the previous day’s closing of Rs283.80 at the time of reporting.
Interbank closing #ExchangeRate for today https://t.co/0BIZQ7D7oW#SBPExchangeRate pic.twitter.com/2RrCNnIszx
— SBP (@StateBank_Pak) July 19, 2023
Australian Dollar Surges on Employment Data
Meanwhile, in the international money markets, the Australian dollar experienced a significant surge after the country’s employment data exceeded expectations. Australia’s net employment rose by 32,600 in June from May, surpassing forecasts of a 15,000 increase.
Consequently, the Aussie spiked over 0.9 per cent to an intra-day high of $0.6834, with the New Zealand dollar also following suit, gaining 0.57 per cent to $0.6299. Both Antipodean currencies were on track to reverse four consecutive sessions of losses.
Yuan Gains Momentum Amidst Chinese Measures
In Asia, China decided to keep its lending benchmarks unchanged, as expected, but it relaxed a cross-border financing rule to counter the decline of its currency. By raising the cross-border macro prudential adjustment ratio for corporates and financial institutions, China aimed to facilitate domestic firms’ access to funds from overseas markets, thereby potentially easing pressure on the yuan.
As a result, the yuan strengthened more than 0.5 per cent against the US dollar in both the onshore and offshore markets. The offshore yuan last bought 7.1901 per dollar, while the onshore yuan reached a session-high of 7.1620.
In the broader currency market, the British pound was nursing losses after a sharp fall in the previous session due to disappointing inflation data from Britain. Sterling managed to recover slightly, rising by 0.15 per cent to $1.2958 after declining more than 0.7 per cent on Wednesday. The weaker inflation reading has lowered market expectations of aggressive rate hikes from the Bank of England (BoE), making the possibility of rates rising above 6 per cent less likely. Traders had previously anticipated interest rates to go as high as 6.5 per cent.
The euro saw a 0.24 per cent increase to $1.1227 as investors awaited further clarity on the rate outlook from the European Central Bank (ECB) policy meeting scheduled for next week. Recent statements from ECB policymakers indicated a more dovish stance, with the possibility of rate increases beyond the expected 25 basis points in July remaining uncertain.
The US dollar index recovered slightly, standing at 100.03 after a knee-jerk reaction last week, where it fell more than 2 per cent following cooler-than-expected US inflation data.
Lastly, the Japanese yen rose 0.3 per cent to 139.23 per dollar.
