Rupee slips amid decline in Asian peers amid moderation in Fed rate cut hopes

rupee weakened on Tuesday reflecting a trend seen across its Asian counterparts due to diminishing expectations of aggressive rate cuts by US Federal Reserve.

As of 10:00 am, rupee was at 83.1225 against US dollar, marking a 0.07 per cent decline compared to its previous close at 83.0650 on Friday. Monday's closure of Indian markets for a local public holiday contributed to subdued activity.

dollar index showed a decrease, quoted at 103.21, while several Asian currencies saw marginal declines. tably, offshore Chinese yuan saw a nearly 0.3 per cent increase, fuelled by reports that China is contemplating a rescue pack for its struggling stock markets.

Japanese yen remained relatively stable following Bank of Japan's decision to maintain its ultra-loose monetary policy on Tuesday.

Market analysts anticipate rupee to fluctuate within range of 83.05 and 83.20 on Tuesday, with routine dollar demand being a key driver of price movements, according to a foreign exchange trer at a state-run bank.

ongoing reassessment of rate cut expectations by US Federal Reserve is expected to limit short-term gains for Asian currencies. Robust US ecomic data and resistance from Fed officials have led investors to scale back ir expectations of aggressive rate cuts. Currently, re is a 56.5 per cent probability that Fed will leave rates unchanged in March, up from only 19 per cent as of January 12.

Forward premiums for rupee eased, with 1-year implied yield falling by 1 basis point to 1.86 per cent. Looking ahe, Amit Pabari, Managing Director at FX visory firm CR Forex, suggests that a convincing breach of 82.80 level could pave way for furr rupee appreciation over medium term.

Investors are also keeping a close watch on European Central Bank's upcoming monetary policy decision on Thursday and highly anticipated US personal consumption expenditure (PCE) inflation data scheduled for release on Friday. se events are likely to influence market sentiment and currency movements in near term.

(With Reuters inputs)