MUMBAI: The Indian rupee declined on Thursday as dollar demand from local oil companies weighed on the local unit, while traders awaited GDP and labour market data from the United States.
The rupee ended at 83.2775 against the US dollar, down 0.13% from its previous close at 83.17.
The dollar index was little changed at 102.37 and most Asian currencies were subdued. The 10-year US Treasury yield was slightly lower in Asia hours at 3.86% and was hovering close to its lowest levels since July.
Oil companies lapped up dollars throughout the session and some foreign banks were on bid as well, likely on behalf of custodian clients, a foreign exchange trader at a private bank said.
While the rupee had strengthened to a high of 82.90 on Monday, it has since shed gains despite some softness in the US dollar, which is down about 0.15% this week so far.
“Momentary dips have become characteristic of the dollar-rupee pair,” said Abhilash Koikkara, head of forex and rates at Nuvama Professional Clients Group.
Koikkara added that he expects the rupee to continue hovering between 83 and 83.40 for the rest of the month.
Investors now await key US economic data due later on Thursday.
US third-quarter GDP data is expected to show the economy grew by 5.2%, from 2.1% in the previous quarter, while initial jobless claims are likely to tick up to 215,000, according to Reuters’ polls.
A downside surprise on GDP or higher-than-expected jobless claims could bolster bets that the Federal Reserve will begin easing rates soon.
Investors are currently pricing in a little over 80% chance that the Fed will cut rates in March, according to the CME Group’s FedWatch tool.
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