MUMBAI, June 13 (Reuters) – The Indian rupee was nearly flat on Thursday, as dollar demand from local corporates offset the impact of gains in Asian currencies after a softer-than-expected U.S. inflation print pushed Treasury yields lower.
The rupee was at 83.53 against the U.S. dollar as of 10:30 a.m. IST, barely changed from its close at 83.5450 in the previous session.
The greenback and U.S. bond yields trimmed declines as the Fed’s updated interest rate dot plot projected only one rate cut in 2024, down from three signalled in March.
Despite the hawkish shift in policymaker’s expectations, the odds of a September rate cut rose to about 57%, up from 47% a day earlier, according to CME’s FedWatch tool.
“We think by the time the September policy meeting takes place, there will be plenty of data available for FOMC members to see that inflation worries have abated largely,” DBS Bank said in a note.
Asian currencies were mostly higher, with the Malaysian ringgit, up 0.2%, leading gains.
The dollar-rupee pair is “a buy on dips” currently and might not fall below 83.40 in the near-term, a foreign exchange trader at a large private bank said.
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Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala
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