The Indian rupee was little changed on Thursday despite the broad losses in the U.S. dollar. The rupee opened at 81.9975 to the dollar, barely moved from Wednesday's close of 81.9950.
Other Asian currencies strengthened by between 0.2% and 0.5% as the dollar index slipped to 100.86. Analysts expect that the Federal Reserve's recent rate hike could mark a peak in policy rates.
However, there was demand for dollars from real users, according to an FX salesperson at a bank. The Reserve Bank of India (RBI) has likely intervened recently to prevent the rupee from appreciating past 81.70, traders said.
The dollar came under pressure as analysts viewed that the Fed is unlikely to hike rates further. The Fed raised rates by 25 basis points as expected but left the door open for more hikes. However, economists think that additional hikes will not be needed.
ANZ said in a note that "current policy rates are at levels that will restrain final private demand, jobs growth and return inflation to target." Morgan Stanley expects the Fed will now "be on hold for an extended period" and will cut rates in March 2023.
