By Nimesh Vora
MUMBAI, May 10 (Reuters) - The Indian rupee was little
changed to the U.S. dollar on Wednesday morning as traders
gauged the near-term trend after the local unit suffered its
worst day in almost two months in the previous session.
The rupee was quoted at 82.04 per dollar by 10:10 a.m. IST
and has held a range of 81.9650 to 82.0650 so far.
The currency weakened 0.29% to 82.0375 on Tuesday, pressured
by stop losses and dollar demand from importers, according to
traders.
"Although an increase in volatility is to be welcomed, the
sustainability of the trend is considerably more crucial," said
Anindya Banerjee, head of research, fx and interest rates, Kotak
Securities.
"The USD/INR has been in a downtrend since early March but
has been unable to maintain an upward trend. Today, we need to
see follow-through action. The U.S. inflation report tonight is
a crucial piece of economic data."
Economists polled by Reuters estimate the U.S. core
inflation rose 0.4% month-on-month in April, matching the pace
in March. The headline inflation rate is expected to have risen
5% on-year.
The data comes a week after the Federal Reserve left the
door open to pausing its tightening cycle. Interest rate futures
are currently pricing in a near 80% probability of a pause in
June. "The upside surprises in the U.S. job report last week have
failed to drive much of a change in rate expectations,
suggesting that it could have to take a significant pull-ahead
in inflation readings to alter market expectations for an
upcoming rate pause, along with 75 basis-point rate cuts by the
end of the year," said Yeap Jun Rong, market strategist at
broker IG Asia.
Asian currencies were mostly rangebound, while equities were
lower. The dollar index was hovering just above 101.50.
(Reporting by Nimesh Vora; Editing by Savio D'Souza)
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