By Nimesh Vora
MUMBAI (Reuters) – The Indian rupee was slightly higher on Tuesday on the back of inflows, holding its positive bias heading into the crucial U.S. consumer inflation data.
The rupee was at 82.7425 to the U.S. dollar at 10:55 a.m. IST, up from 82.7575 in the previous session.
The rupee has been in a narrow 3 paisa range, having reached a more than six-month high on Monday.
“At least from our side, we have seen good bit importer hedging the last few days,” a foreign exchange salesperson at a private bank said.
“That I think we can extrapolate to other banks. The thinking that rupee is a range-bound currency means decent dips and rallies will always see a pickup in hedging.”
Amit Pabari, managing director at fx advisory firm CR Forex, said the rupee was “poised for strength” on the back of inflows and robust India economic fundamentals.
“The rupee is expected to trend towards the 82.50 level,” he said.
Other Asian currencies were mostly lower on the day ahead of the U.S. inflation data.
The February inflation data will hold cues on whether January’s higher reading was just a blip or that prices are proving more persistent.
“Our main interest in the data is to observe the degree of inflation persistence, or stickiness,” ANZ Bank said in a note.
Super-core inflation rose 0.85% in January, the highest month-on-month reading in 22 months, the note added.
Economists polled by Reuters expect U.S. headline inflation to rise by 0.4% and core by 0.3%.
(Reporting by Nimesh Vora; Editing by Sohini Goswami)
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