MUMBAI, July 9 (Reuters) – The Indian rupee closed nearly flat on Tuesday, tracking largely subdued price action in its Asian peers, as investors awaited comments from the Federal Reserve Chair for cues on the future path of U.S. interest rates.
The rupee ended at 83.4850 against the U.S. dollar, barely changed from its close at 83.4925 in the previous session.
Indian state-run banks were “active on both sides,” like on Monday, which along with mostly quiet price action in Asian currencies, kept the rupee in a tight range, a foreign exchange trader at a foreign bank said.
The rupee lingered in the 83.4775-83.51 band through the day’s session. The currency has maintained an under 10 paisa intra-day trading range so far in July.
Fed Chair Jerome Powell will deliver his semi-annual testimony on monetary policy in front of U.S. lawmakers on Tuesday and Wednesday.
His remarks may offer fresh cues on the timing of Federal Reserve rate cuts after a string of recent data, including a soft jobs report, helped drive up the odds of September rate reduction to over 75% from nearly 70% last week, according to CME’s FedWatch tool.
The dollar index is likely to “hover around 105 into the CPI (consumer price index) risk event on Thursday, with any dovish surprises from Powell potentially being offset by EU political concerns,” ING Bank said in a note.
U.S. consumer inflation data is scheduled on Thursday, followed by India’s inflation reading on Friday.
Despite a raft of global cues lined up this week, traders expect the rupee to largely hover in its current trading range and be well-supported near 83.60, on expectations that the Reserve Bank of India will curb sharp falls while facing stiff resistance on attempts to rise above 83.25.
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Reporting by Jaspreet Kalra; Editing by Sonia Cheema
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