Rupee records gain against US dollar

The Pakistani rupee experienced a slight increase against the US dollar on Monday, closing at 277.06, marking a gain of Re0.01 from the previous day. This marginal improvement marks the second consecutive week of the rupee's marginal gain against the greenback, which appreciated by 0.03% during the previous week. Internationally, the US dollar initiated the week near a 17-month high, hovering close to a 17-month high as traders evaluated the diminishing likelihood of a Federal Reserve rate hike this month following weak US jobs data and fiscal concerns in France.

The euro weakened to $1.1246, its lowest level since May 2025, due to rising French debt levels and political uncertainties ahead of next year's election. Meanwhile, the British pound reached $1.3241, and the Japanese yen was trading at 157.69 per US dollar in early Asian trading hours. This left the dollar index at 101.97. The recent drop in global bond prices, which pushed borrowing costs to multi-decade highs and crippled French debt, has left markets unsettled amid worries over inflation risks from rising oil prices.

Traders now project a 78% probability of the US Federal Reserve maintaining interest rates steady in October, up from 36% the previous week, according to the CME FedWatch tool. Despite this, expectations of a rate hike in December and two more hikes in the first half of 2027 remain. Oil prices ticked lower on Monday as increased Middle East crude exports and a G7 release of oil stocks boosted supplies, compensating for concerns over further damage to Gulf oil infrastructure following the US-Israeli conflict with Iran.

Brent crude futures fell 66 cents, or 0.65%, to $101.59 a barrel, while US West Texas Intermediate crude declined 95 cents, or 1.03%, to $90.12 a barrel.