Non-deliverable forwards indicate the rupee will open flat from 83.5925 in the previous session. The dollar index inched up and Asian currencies were down between 0.1% to 0.3%. The rupee hit an all-time low of 83.6650 hit last month.
At this level of the rupee, the impact of the moves in Asia will be "all the more" lower, a currency trader said.
"Clearly, the level to watch is 83.6650 and odds are that RBI will be defending that."
The Reserve Bank of India, via regular intervention, has held the rupee in a narrow range. It is widely expected that the central bank will continue to do.
Asian currencies are struggling despite an increasing likelihood that the Federal Reserve will cut rates at least twice this year. A September rate cut has been fully priced in and futures are indicating a total of 68 basis points of rate cuts in 2024 amid softening inflation.
Fed Chair Jerome over the June quarter do "add somewhat to confidence" that the pace of price increases is returning to the Fed's target in a sustainable fashion.
"Following recent US data releases on employment and inflation, we think that if Fed members were to submit their dot plot estimates now, a significant majority of members would be pencilling in two cuts this year and some of the more dovish members might be considering three," ANZ Bank said in a note.
Analysts have said the higher odds of Donald Trump winning the November election following his assassination attempt may be the reason Asian currencies are struggling.
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