Rupee registers gain against US dollar

On Monday, the Pakistani rupee continued its slight improvement against the US dollar in the interbank market, closing at 277.22 per dollar, marking an increase of Re0.03. The rupee had risen 0.03% last week to settle at 277.25 against the US dollar. Globally, investors turned their attention to the yen on Monday after it dropped sharply last week, raising speculation about a possible rate check from Japan's central bank.

The yen traded at 156.64 per US dollar, up slightly from its previous week's decline of 2%. Japan's markets were closed for a three-day holiday, creating low liquidity and raising concerns about potential official intervention to support the yen. Meanwhile, the euro remained unchanged at $1.1482, following voting results that saw the far-right Alternative for Germany party leading in state elections in northeastern Germany, which could impact Chancellor Friedrich Merz's conservative party.

The dollar index, tracking the US currency against six major peers, stayed steady at 100.23 after a 1% gain last week following the Federal Reserve's rate hike. Traders now estimate a 55% chance of another rate increase at the Fed's October meeting, up from 42.5% the previous week, according to the CME FedWatch tool. Meanwhile, oil prices, a crucial factor in currency valuation, fell to their lowest level in over a week on Monday as traders hoped for diplomatic progress on the Iran war due to this week's UN meeting and looked for a partial recovery in shipments from Saudi Arabia despite ongoing attacks by Yemen's Houthis.

Brent crude futures and US West Texas Intermediate crude hit their lowest levels since September 10, with Brent crude for November at $102.09 a barrel, down $1.78, or 1.71%, from the previous session. The WTI October contract, expiring on Tuesday, decreased by $1.97, or 1.96%, to $98.33 a barrel, following a 1.58% drop in the prior session.