PTBP Web Desk
The rupee (PKR) experienced a marginal appreciation against the US dollar in the inter-bank market, marking a 0.07% increase during the early trading hours. By 10:20 am, the exchange rate stood at 279.02 PKR per USD, reflecting a gain of Re0.2 from its previous closing rate of 279.22 on Monday. This subtle strengthening of the rupee comes at a time when global markets are reacting to significant policy shifts in the United States.
Globally, the US dollar showed resilience, firming up as President Donald Trump announced plans to substantially increase tariffs on steel and aluminium imports, setting a new tariff rate of 25% effective from March 4. This move was part of Trump’s broader strategy to impose reciprocal tariffs, which he vowed to detail in the coming days. The announcement led to a cautious approach in trading, with currencies in Asian markets maintaining tight ranges. Trading volumes were notably lower due to a holiday in Japan, which typically influences market liquidity.
The US dollar’s firmness was evident against the Canadian dollar, where it appreciated by 0.13% to C$1.4332. Despite this gain, the Canadian dollar, or loonie, remained well off from its 22-year low hit earlier in the month. Traders around the world were also on edge, awaiting key economic indicators from the US, including a testimony by Federal Reserve Chair Jerome Powell and upcoming inflation data, which could provide insights into the future direction of interest rates in the world’s largest economy.
Recent statements from Federal Reserve officials have indicated a cautious approach towards further rate adjustments, emphasizing a need for clarity on how Trump’s trade policies might affect economic growth and inflation. Market futures are currently pricing in less than 40 basis points of rate cuts by the end of the year, reflecting this uncertainty.
Against a basket of currencies, the US dollar index was little changed at 108.35, holding onto gains from the previous trading session. This stability comes amidst a backdrop where the greenback’s strength is seen as a barometer for global economic health, especially in light of the new trade tariffs.
Parallel to these currency movements, oil prices remained relatively steady, with traders contemplating the impact of the new tariffs on global economic demand. Brent crude futures saw a minor increase of 11 cents or 0.14%, trading at $75.98 per barrel, while US West Texas Intermediate crude went up by 5 cents or 0.07% to $72.37 per barrel. The linkage between oil prices and currency values is crucial, as oil, being a primary import for many countries, directly influences their currency strength through trade balances and inflation expectations.
