Rupee to remain under pressure following dollar index up move

MUMBAI, Aug 9 (Reuters) - The Indian rupee is expected to struggle at the opening on Wednesday in the wake of the dollar indexs move higher on weak risk appetite.

Non-deliverable forwards indicate rupee will open slightly weaker to the U.S. dollar from 82.8275 in the previous session.

“If you take into account the current level, it is to be expected that incremental moves higher (on USD/INR) will be quite slow and measured,” a forex trader at a bank said.

“USD/INR longs, which we do not think are too many, may not like this measured pace, but will take comfort that 83 is just right there.”

The rupee over the last couple of sessions has repeatedly taken support at around 82.80-82.85, which a few market participants reckon is due to the Reserve Bank of Indias intervention.

Moodys cut the credit ratings of 10 small- to mid-sized U.S. banks and placed six large lenders on review for potential downgrades on strains from higher funding costs and rising risks.

“Unless the upcoming U.S. inflation data is way different from consensus, USDINR could stick to the current range for some more time,” said Srinivas Puni, managing director at QuantArt Market Solutions.

The RBI policy decision is due at 10:00 a.m. on Thursday. The central bank is expected to make no changes to the policy rate but will retain the hawkish tone amid the recent jump in food prices.

KEY INDICATORS:

** One-month non-deliverable rupee forward at 82.92; onshore one-month forward premium at 8 paisa

** USD/INR NSE August futures settled on Monday at 82.9250

** USD/INR August forward premium at 5.5 paisa

** Dollar index at 102.48

** Brent crude futures down 0.1% at $86 per barrel

** Ten-year U.S. note yield at 4.02% ** As per NSDL data, foreign investors bought a net $272.2mln worth of Indian shares on Aug. 7

** NSDL data shows foreign investors sold a net $7mln worth of Indian bonds on Aug. 7