The Pakistani rupee strengthened against the US dollar, rising 0.7% in the first hours of trading on Thursday.
At 11:10 a.m., the rupee was trading at 287.43, up Rs1.95 in the interbank market.
On Wednesday, the rupee fell for the third consecutive session against the US dollar, falling 0.64% to close at 289.38.
In a significant move, the Senate on Wednesday enacted legislation authorising the establishment of a state-owned Pakistan Sovereign Wealth Fund to diversify the country’s economy and build wealth for future generations.
Globally, the US dollar was around a four-week high on Thursday, ignoring a reduction of the country’s credit rating, which threw doubt on the country’s fiscal prospects, and instead benefiting from robust private payroll statistics.
The release of data on Wednesday indicating that US private payrolls increased more than expected in July bolstered the greenback, pointing to sustained labor market strength, which is likely to keep US rates higher for longer.
In the previous session, the dollar index reached its highest level since July 7. It was last at 102.56, not far from its high of 102.78 on Wednesday.
Oil prices, a crucial currency parity indicator, were little changed on Thursday after a two-day slide, including a severe drop on Wednesday, as the US government’s credit downgrade impacted on sentiment, albeit supply concerns gave some support.