RBI support may cushion India rupee amid Asian softness

The rupee is expected to open largely unchanged after settling 0.12% higher at 90.1650, with market participants citing possible Reserve Bank of India support amid softer Asian currencies.

India's rupee is set to open largely unchanged and trade in a narrow range as market participants point to potential Reserve Bank of India involvement. The 1-month non-deliverable forward signalled a flat open after the rupee settled 0.12% higher at 90.1650 on Tuesday. The currency ended a four-day losing run as traders flagged possible central bank support, though the extent and nature of any intervention were not clear. Regional currency softness and upcoming U.S. economic data are cited as additional influences on market direction. Key points: - The 1-month non-deliverable forward indicated a flat open after the rupee settled 0.12% higher at 90.1650. - The rupee snapped a four-day losing streak and bankers flagged possible Reserve Bank of India support, without clarity on details. - The currency rallied to nearly 90.10 intraday before importer demand and some speculative dollar buying re-emerged. - Most Asian currencies inched lower and the dollar index hovered near 98.50. - MUFG Bank said dollar upside finding support at 98 remained constrained amid market expectations of further Federal Reserve rate cuts. - NSDL data showed foreign investors bought a net $81.7 million of Indian shares and sold a net $38.7 million of Indian bonds on Jan. 2. Summary: Expectations of Reserve Bank of India support helped steady the rupee after recent losses while broader Asian currencies were slightly weaker. Traders said a busy slate of U.S. economic releases this week will shape expectations for the Federal Reserve's rate path and influence dollar momentum. Market flows and the central bank's presence are likely to remain factors in near-term trading.