The local currency closed at Rs277.68 as compared to the previous day’s closing of 277.84.
However, the buying and selling rates of the dollar in the open market stood at Rs278.75 and Rs280.25 respectively, the Forex Association of Pakistan (FAP) said.
The State Bank of Pakistan (SBP) said that the price of Euro decreased by Rs1.93 to close at Rs 309.02 against the last day’s closing of Rs 310.95.
The safe-haven dollar edged down on Thursday on increasing risk appetite with traders looking ahead to speeches from key Federal Reserve policymakers and economic data later in the day for clues on the pace of interest rate cuts.
Meanwhile, the Swiss franc rose after the Swiss National Bank cut interest rates by 25 basis points. Future markets and some analysts expected a bigger cut of 50 bps after the Federal Reserve made such a move last week.
European and Asian stocks extended a China-led rally, fuelled by optimism over the country’s aggressive stimulus package and news that more support could be in the works.
“These days, in the forex market, it’s all about the Federal Reserve monetary path and U.S. economic data,” said Nick Andrews, forex strategist at HSBC.
The dollar rebounded sharply overnight from its lowest levels in over 14 months. It tumbled on Tuesday after data showed that U.S. consumer confidence dropped by the most in three years in September amid mounting fears over the labour market, increasing market bets on Fed rate cuts.
"Beijing (stimulus plan) has juiced the markets during what was otherwise a typically quiet day ahead of U.S. data," said Matt Simpson, senior market analyst at City Index.
The dollar index , which measures the currency against the euro, sterling, yen and three other major peers, eased 0.20% to 100.73, following a 0.57% jump on Wednesday, its biggest one-day gain since June 7.
Weekly U.S. jobless claims data will be closely scrutinised, given the Fed s shift in focus to employment over inflation.
The euro rose 0.13% to $1.1148 , after pulling back from $1.1214, a high not seen since July last year.
Some analysts said a better outlook for Chinese demand after the stimulus plan announcement fed back into expectations for the economies of Germany and, more broadly, Europe.
The yen hit a three-week low of 145.04 per dollar and last fetched 144.56.
Investors were closely watching political developments as the Liberal Democratic Party will choose a new leader on Friday, with the winner due to take over as prime minister due to the party s majority in parliament.
The Australian dollar added 0.75% to $0.6873, finding its feet after Wednesday s one percent retreat from a 19-month peak of $0.6908.
The Chinese yuan rose 0.46% to 7.0 per dollar in offshore trading after it pulled back on Wednesday from its highest since May of last year at 6.9952.
The Japanese yen came down by 02 paisa and closed at Rs1.91, whereas a decline of Rs1.72 was witnessed in the exchange rate of the British Pound, which traded at Rs370.32 as compared to the last day’s closing of Rs372.04.
