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The Indian rupee was little changed on Tuesday, tracking muted moves in Asian currencies, as markets await the release of key U.S. economic data this week that will help investors refine their expectations of Federal Reserve rate cuts.
The rupee was at 82.88 as of 10:05 a.m. IST, barely changed from its close of 82.89 in the previous session.
The rupee is broadly expected to keep drifting higher but its nearby resistance at 82.80 is unlikely to break soon, a foreign exchange trader at a private bank said.
While the rupee has been supported by buoyant inflows, local dollar demand and likely intervention by the Reserve Bank of India over the last few trading sessions have kept a lid on gains, traders said.
The dollar index was last quoted at 103.72 while most Asian currencies were rangebound.
In the short term, the local unit is expected to trade within a "narrow range of 82.80 to 83.10", but a rise above the 82.80 level could open up room for further appreciation, Amit Pabari, managing director at FX advisory firm CR Forex said.
Meanwhile, dollar-rupee forward premiums were unchanged on the day but traders reckon that the bias on premiums is likely to tilt lower with a focus on the upcoming March 11 maturity of a $5 billion RBI sell-buy swap.
The one-year implied yield was down 1 basis point at 1.71%, its lowest level since mid-December.
While forward premiums "are stagnant" currently, they are likely to move lower if the RBI takes delivery of the dollars at the time of maturity, the trader cited earlier said.
Investors now await the release of U.S. durable goods orders and consumer confidence data, due later in the day. (Reporting by Jaspreet Kalra; Editing by Janane Venkatraman)