By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee closed little changed on Tuesday as exporters’ dollar sales helped offset the decline in Asian currencies, which were pressured by tempered hopes of another hefty interest rate cut by the U.S. Federal Reserve.
The rupee closed at 83.82 against the U.S. dollar compared with its close at 83.7925 in the previous session.
Asian currencies weakened with the Thai baht and Malaysian ringgit down about 1% each and leading losses.
Current levels in the rupee are “decently appealing,” to exporters and the interest should pick up closer to 83.90, helping cap the currency’s decline, a salesperson at a foreign bank said.
Dollar demand also eased on Tuesday compared to the previous session, which was magnified due to quarter-end adjustments, the salesperson said.
The dollar index rose to the 101 mark, adding to Monday’s 0.3% rise after remarks from Fed Chair Jerome Powell prompted traders to temper expectations of a 50-basis-point rate cut at the central bank’s November meeting.
Despite the dip in odds of a larger-than-usual rate reduction at the Fed’s next meeting, interest rate futures continue to price in 72 basis points of cumulative Fed rate cuts over the remaining two policy decisions.
Investors are “effectively betting that soft data will force a September-like Fed surprise in one of the next two meetings. That signals the balance of risks in the very near term is probably skewed to the upside for the dollar,” ING Bank said in a note.
Attention now turns to the U.S. job openings data due later in the day, ahead of the release of the closely watched non-farm payrolls report on Friday.
Indian financial markets will remain shut on Wednesday for a public holiday.
(Reporting by Jaspreet Kalra; Editing by Eileen Soreng)
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