The Indian rupee ended nearly flat on Thursday after oscillating in a tight band, as likely intervention by the Reserve Bank of India helped the unit withstand pressure from foreign banks‘ dollar bids and weakness in Asian currencies ahead of the U.S. inflation data.

The rupee closed at 83.9675 against the U.S. dollar, almost unchanged from its close at 83.9625 in the previous session. The currency hovered in a 2 paisa band during the session

Two large U.S. headquartered banks dominated dollar bids while “at current levels, state-run banks are constantly on offer (on USD/INR),” most likely on the RBI’s behalf, a senior trader at a foreign bank said.

Outflows from local equities have kept the currency on the backfoot with foreign investors pulling out about $7 billion from stocks over the last eight trading sessions.

The U.S. dollar and bond yields have been boosted by investors pricing a less aggressive monetary easing cycle from the Federal Reserve. The 10-year U.S. Treasury yield rose to a peak of 4.08% on Thursday, its highest since July 30.

Dollar-rupee forward premiums have declined as a result of bets on shallower Fed rate cuts alongside the RBI changing its policy stance to “neutral,” on Wednesday. The 1-year implied yield is down 19 bps over October so far and last quoted at 2.20%, its lowest in a month. Asian currencies were mostly lower by 0.1% to 0.4% while the dollar index was at 102.9, hovering close to its highest level in about two months.

The dollar index “could make a bid for the 103.35 area should the US core CPI (consumer price index) surprise on the upside today. Geopolitical uncertainty should also help the dollar,” ING Bank said in a note



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