MUMBAI: The Indian rupee ended marginally lower on Wednesday due to slight pressure from importers’ dollar bids, but was stuck in a narrow range for most of the session amid mostly quiet price action in its Asian peers.
The rupee closed at 83.52 against the US dollar, slightly weaker than its close of 83.4850 in the previous session.
The currency hovered between 83.4825 and 83.5225 during the day’s session.
Dollar bids from importers, including local oil companies, and foreign banks pressured the rupee slightly, a foreign exchange trader at a private bank said.
Asian currencies were mostly rangebound, while the dollar index held above 105 after Federal Reserve Chair Jerome Powell struck a balanced tone in his remarks to US lawmakers on Tuesday.
While the Fed chair said the labour market was better balanced and acknowledged progress on cooling inflation, he steered clear of signalling a timeline for potential rate cuts by the central bank.
The odds of a rate cut in September have eased slightly to 73% from about 76% on Tuesday, according to CME’s FedWatch tool.
Meanwhile, dollar-rupee forward premiums slipped.
The 1-year implied yield fell 1 basis point to 1.65%, with traders pointing to likely profit booking by paid positions.
“Importers continue to maintain their pace of buying dollars due to elevated oil prices, which keeps downward pressure on the rupee,” said Amit Pabari, managing director at FX advisory firm CR Forex.
The focus now turns to remarks from other Fed policymakers later in the day, followed by the US consumer inflation data on Thursday.
Economists polled by Reuters expect month-on-month core US CPI to have held steady at 0.2% in June.
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