By Sethuraman N R
MUMBAI (Reuters) - The Indian rupee inched lower on Tuesday, tracking the Chinese yuan-led decline on most Asian currencies, although losses were capped by portfolio inflows.
The rupee was at 82.68 to the U.S. dollar by 10:46 a.m. IST, compared to 82.6250 on Monday. It had opened at 82.65 and has been in a near-4 paisa range so far.
The Chinese yuan declined against the dollar, falling past the 7.10 level for the first time since Nov last year, weighed by a stuttering economic recovery and a hawkish outlook from the U.S. Federal Reserve.
The pressure on the rupee will persist and we could revisit the 82.80 level, said Arnob Biswas, FX research analyst at SMC Global Securities.
The rupee is down about 1% this month so far, potentially headed for its worst performance since December 2022. The dollar index is up about 2.5% in May.
Foreign inflows into equities and likely intervention by the Indian central bank has helped limit the currency's losses, said Ritika Chhabra, quant macro strategist at Prabhudas Lilladher PMS.
Foreign investors have poured in about $5 billion into Indian equities this month.
Meanwhile, the 1-year rupee forward premium was little changed at 1.75%, hovering near its lowest level this year. The jump in U.S. yields on expectations that the Fed is not done with its monetary tightening cycle has prompted a nearly 50 basis point fall in the 1-year implied yield.
The focus is now on the U.S. jobs data due on Friday and the country's inflation number, which will be released next week. The Fed will meet on June 13-14.
(Reporting by Sethuraman NR in Mumbai; Editing by Sonia Cheema)