Rupee stable after exporter dollar sales offset Asian currency weakness

Rupee steady: India's rupee closed relatively unchanged on Tuesday, ending at 83.82 against the dollar, after being at 83.7925 in the previous session. Exporters' dollar sales offset a broader decline in Asian currencies, which were knocked down by lower expectations for a significant interest cut by the U.S. Federal Reserve.

Asian currencies softened on the whole, with the Thai baht and Malaysian ringgit falling each by about 1 percent. "Decent enough" to be attractive for exporters the current levels of the rupee are, according to a foreign bank salesperson; interest could pick up as the rupee peaks at 83.90, capping further falls.

Demand for dollars eased a bit from the previous session, which was exacerbated by quarter-end adjustments. The dollar index stood at 101 after posting a 0.3 per cent gain from Monday on the back of comments by Fed Chairman Jerome Powell that tempered expectations of a significant 50-bps rate cut at the Fed's upcoming November meeting.

While the likelihood of a deep rate cut has diminished, rate futures continue to incorporate expectations for 72 basis points in cumulative cuts at the Fed's remaining policy meetings this year. According to ING Bank, investors are still betting that softer economic data will serve as a catalyst to deliver an upside surprise in the form of a rate adjustment similar to last September's, and risks for the dollar remain skewed to the upside in the near term. US job openings data is slated for release later today. 

That would be ahead of a widely anticipated non-farm payrolls report on Friday. Indian financial markets are scheduled to remain closed on Wednesday, which has been declared a public holiday.