Pakistani rupee strengthens as most Asian currencies edge lower
KARACHI: (Suno News) In the interbank market, Pakistan rupee against the US dollar recorded a marginal increase though most Asian currencies edged lower on Tuesday.

 According to the State Bank of Pakistan, a marginal increase of Re0.10 in the value of the Pakistani rupee against the US dollar has been seen in the interbank market, after which the new price in the interbank market has become Rs278.40.

Also read: Pakistani rupee largely stable against globally falling US dollar

Meanwhile, most Asian currencies edged lower ahead of Federal Reserve Chair Jerome Powell s closely watched two-day testimony before Congress starting later in the day. The dollar index was at 105 after rising 0.1% on Monday.

Powell s remarks will follow a string of relatively soft U.S. economic data which has helped push up the odds of a September rate cut by the Fed to above 75%, according to the CME s FedWatch tool.

"If Powell hints that the Fed is closer to an interest rate cut in September, it could send the (dollar index) below 104.75, a critical support level," DBS Bank said in a Tuesday note.

However, traders do not expect Powell s remarks to have a notable impact on the rupee.

The Indian rupee was largely flat in early trading on Tuesday as mild dollar sales from India’s state-run banks supported the currency even as most of its Asian peers slipped.

The rupee was at 83.4775 against the US dollar as of 10:10 a.m. IST, barely changed from its previous close at 83.4925.

It is "tricky to say" which cue may move the currency out of the prevailing 83.40-83.60 band, with the Reserve Bank of India expected to limit depreciation, while corporate dollar demand caps gains, a foreign exchange trader at a state-run bank said.

Inflows worth about $2.1 billion into Indian debt and equities over July so far, according to stock depository data, have also supported the rupee.

Mostly range-bound price action though has squeezed volatility expectations on the dollar-rupee pair with the 1-month implied volatility dropping to 1.75%, its lowest since March.

Alongside Powell s testimony, remarks from other Fed speakers will also be in focus heading into the U.S. consumer inflation print on Thursday.