India rupee ends marginally down as traders await fresh triggers

The Indian rupee declined slightly on Thursday as the impact of equity inflows and some softness in Brent crude oil futures was more than offset by importer hedging and oil companies' dollar demand, traders said.

The rupee closed at 83.03 against the US dollar, compared with 82.9850 in the previous session.

The rupee's depreciation is capped at 83.30 currently, while its strength seems to be limited at 82.85/90, said Arnob Biswas, head of foreign exchange research at Kotak Securities.

"To break that, we need the dollar index to be lower."

The dollar index was largely unchanged at 104.78. Asian currencies were mixed, with the offshore Chinese yuan weakening by 0.09 percent to 7.2765.

Brent crude oil futures softened to $92.44 per barrel after touching a year-to-date high of $92.84 on Wednesday.

Indian banks, both private and state-run, were seen offering dollars in the spot market, while oil companies were seen on the bidding side, a foreign exchange trader at a foreign bank said.

"Offers are likely to continue close to 83 levels, supporting the rupee."

The rupee has held in a narrow range of 82.8225 and 83.05 so far this week. Equity inflows worth $500 million-$550 million related to FTSE index rejig are expected on Friday and should support the rupee, traders said.

Meanwhile, the US will report initial jobless claims later today, which could offer further cues on the state of labour market, a key determinant of US Federal Reserve policy.

Investors will also be keeping an eye on the European Central Bank's rate decision due later yesterday.

Markets are factoring in a 65 percent chance of a 25-basis-point hike that could take Europe's key interest rate to a record peak.