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Rupee just shy of record low, foreign banks’ dollar sales support

By Jaspreet Kalra

MUMBAI (Reuters) – The Indian rupee was little changed on Thursday but was hovering near its record low, as dollar sales from foreign banks and an uptick in Asian peers helped cap its decline.

The currency was at 83.4375 against the U.S. dollar of 10:15 a.m., barely changed from its close at 83.4350 in the previous session. The rupee slipped to an all-time low of 83.45 last week.

Foreign banks were seen offering dollars in early trading which helped ease some of the pressure on the rupee, a foreign exchange trader at a state-run bank said.

Still, the rupee is likely to “continue depreciating slowly” in the near-term, Apurva Swarup, vice president at Shinhan Bank India said.

The dollar index was at 104.2 after falling 0.5% on Wednesday, as Federal Reserve Chair Jerome Powell maintained his baseline outlook that rates will fall “later this year”.

U.S. bond yields also slipped after rising initially as U.S. private payrolls rose more than expected in March.

The 10-year U.S. Treasury yield rose to a peak of 4.42%, its highest level since late-November, on Wednesday but was last at 4.36%.

Meanwhile, Atlanta Fed President Raphael Bostic said that rates should likely not be reduced until the fourth quarter of 2024 and that he anticipates only one quarter-percentage-point cut will be appropriate over the year.

Expectations of a June rate cut by the Fed were largely unchanged at slightly above 60% following the remarks.

Most Asian currencies ticked up with the Malaysian ringgit, up 0.3%, leading gains.

Investors will now keep an eye on U.S. jobless claims data and remarks from a slate of Fed officials, who speak on Thursday.

(Reporting by Jaspreet Kalra)

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