BENGALURU: Indian rupee ended slightly lower against the U.S. currency on Tuesday, underperforming Asian peers, weighed down by dollar demand from importers.
The rupee ended at 82.02 per dollar, compared to its close of 81.9575 in the previous session.
The domestic currency rose to a high of 81.75 in the previous session, its highest since May 8, on likely dollar inflows.
Indian rupee ends higher; bargain hunting offsets dollar inflows
However, it has since depreciated slightly on possible dollar buying by the Reserve Bank of India and demand from importers, traders and analysts said.
The RBI doesn’t want the currency to appreciate too much and wants to keep it in a range, said Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors.
Importers have, thus, started hedging on the possibility that the rupee may not strengthen beyond the 81.70 level, traders said.
The U.S. markets holiday also led to very little speculative trading action, analysts said.
Meanwhile, most Asian currencies gained between 0.1% and 0.7%, with the Chinese yuan getting support from the central bank to prevent the currency from weakening.
The U.S. dollar index, which tracks the greenback against six major peers, was mostly flat at 103.
The minutes from the U.S. Federal Reserve’s June meeting, due on Wednesday, and the U.S. non-farm payrolls employment report on Friday could likely influence the Fed’s next rate decision.
Investors see an 87% chance of a 25-basis-points hike in July, according to CME’s Fedwatch tool.
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