The price of the US dollar continued its upward trajectory on the second day after the Eid-ul-Fitr holidays, gaining 13 paisas against the Pakistani Rupee.
The price of the US dollar reached Rs278.25 on Tuesday.
A look at the day ahead in European and global markets from Ankur Banerjee
Rising tensions in the Middle East and the return of a higher-for-longer narrative on U.S. rates have sapped risk appetite, sending Asian stocks tumbling, the dollar climbing to five-month highs, and leaving the fragile yen stuck at levels last seen in the mid-1990s.
The dour mood is set to continue in Europe as bourses there are due to open sharply lower, futures indicate. UK labour and wage data will likely hog the spotlight as traders parse through the reports to gauge when the Bank of England will start its rate-cutting cycle.
Markets are pricing in August as the most likely start date for policy easing, with 49 basis points of cuts expected for the year.
The Federal Reserve on the other hand is likely to be in no rush to start its easing cycle after March retail sales came in higher than expected, the latest evidence of a resilient U.S. economy.
Markets are now pricing in less than two rate cuts this year compared with six (yes, you read that right) rate cuts anticipated at the start of 2024. The starting point for the easing cycle is now September, pushed back from June, which was pushed back from March.
Comments from Fed officials have also led traders to dial back their expectations with San Francisco Federal Reserve Bank President Mary Daly the latest to suggest the Fed is in no hurry to cut rates.
"The worst thing to do is act urgently when urgency is not required," Daly said.
The safe-haven flight to gold and dollars continued as the world awaits word on how Prime Minister Benjamin Netanyahu would respond to Iran's first-ever direct attack. The yen, often sought as a safe asset, weakened further to 34-year lows as the widening difference between U.S. and Japan rates weigh. after a Friday sell off.
Meanwhile, China GDP handily beat estimates but weakness in March data kept investors worried about the country's economic recovery.
China will also be at the forefront of the corporate world's mind as LVMH (LVMH.PA), opens new tab, the world's biggest luxury group, reports earnings, with investors bracing for a steep slowdown in luxury sales amid lacklustre Chinese demand.
