Federal Reserve Speculation Rises Amid Strong US Retail Sales

The Pakistani rupee continued its decline against the US dollar, falling by 0.06% in the inter-bank market on Tuesday. Closing at 278.29, the local currency lost Re0.17 against the greenback, as reported by the State Bank of Pakistan (SBP). This follows a slight drop on Monday when the rupee settled at 278.12 against the US dollar. Internationally, the US dollar remained strong against several currencies, nearing its highest level since early November. Concerns about intervention arose as the yen reached its lowest point since 1990 due to robust US retail sales figures.

US retail sales increased by 0.7% last month, surpassing economists' expectations of a 0.3% rise. Additionally, February's data was revised to show a 0.9% rebound, the largest gain in over a year. These positive figures have led to speculation about the Federal Reserve potentially cutting interest rates, with markets now pricing in a 41% chance of a rate cut in July.

Oil prices dipped slightly on Tuesday due to reduced supply risk concerns and escalating conflicts. Despite China's better-than-expected economic growth in the first quarter, the impact was offset by strong US retail sales data, indicating that the Federal Reserve may not rush to cut interest rates. Brent futures for June delivery fell by 0.3% to $89.84 a barrel, while US crude for May slipped by 0.2% to $85.21.

In the open market, the Pakistani rupee experienced fluctuations against major currencies. Against the US dollar, the PKR lost 16.00 paisa for buying and 2.00 paisa for selling, closing at 277.16 and 279.68, respectively. However, the PKR gained against the Euro for both buying and selling, closing at 293.07 and 295.87, respectively. Against the UAE Dirham and Saudi Riyal, the PKR faced losses, closing at 75.32 and 76.04 against the Dirham, and 73.30 and 73.97 against the Riyal, for buying and selling, respectively.