Pakistan Rupee Gains Vs US Dollar: Traders Plan to Short

Pakistan rupee gained esteem against US dollar but lost ground to the Euro Wednesday. Forex traders in Karachi Thursday plan to hold a short position on the US dollars with expectations that it will decline further.

Buy rate for dollars in the interbank market today were Rs. 85.00 and sell rates were Rs.85.05. In both directions Pakistan rupee was standing strong.

During the Asian trade dollar fell to its lowest in more than two months against yen as investors dumped long positions against other currencies that had built up to levels not seen in more than a year.

Investors have been picking up dollars in recent months as Greece’s credit and fiscal woes hit the euro and worries over a potential hung parliament and speculation that Britain’s asset-buying scheme could be revived knocked the pound lower.

The rupee was higher by 20 paisa against the US currency for buying and selling at 85.20 and 85.40 in open market. The dollar touched a two month low against the yen in Asia on Wednesday due to selling by Japanese exporters, falling long-term U.S. interest rates, and expectations for weak U.S. jobs data.

During Asian trading hours, the dollar fell to Y88.47 on EBS, the lowest since Y88.32 on Dec. 14. That compares with Y88.75 in New York late Tuesday.

If coming U.S. data are weaker than expected, adding to speculation that the Federal Reserve may not start raising its policy rate as soon as had been expected, U.S. yields could fall further, causing the dollar to decline more against the yen, Inoue said. He tips the dollar to trade in a range of Y83.00 to Y91.00 in the coming days.

However, Pakistan rupee lost 50 paisas againts the euro: buying and selling at 114.85 and Rs 115.35. The euro had hit a two-week high Wednesday against the dollar in a sign that Greece’s stepped-up efforts to cut its gaping budget deficit has helped calm investors fears over a possible debt crisis.

But the reprieve for the common currency may not last: There is no assurance the Greek measures will be fully implemented nor was there any word from Germany or France, the euro zone heavyweights, whether they would offer more than just verbal support to the debt-laden Greeks.

Investors are now waiting to see whether “an actual bailout will happen,” said Jessica Hoversen, fixed-income and foreign-exchange analyst at MF Global in Chicago.