The Indian rupee is expected to weaken further on Thursday after minutes of the U.S. Federal Reserve's June meeting indicated most members favored more interest rate hikes in 2022.
Non-deliverable forward contracts show the rupee opening around 82.30 to the dollar, compared with 82.2250 previously. The rupee fell below 82.20 on Wednesday, considered near-term support.
The currency struggled to regain ground due to dollar buying by public sector banks and oil companies, likely for the Reserve Bank of India.
While the Fed opted for a pause in June, minutes revealed some officials could have supported a 25 basis point increase. Most participants judged more hikes this year would be appropriate.
"The meeting minutes support our expectation of a 25 bps hike at the July meeting," ANZ said. Markets are pricing in a July hike.
Most Asian currencies weakened by 0.2% to 0.4%. The 2-year U.S. Treasury yield rose to 4.9630%, near its highest since March.
Upcoming U.S. private payrolls and ISM services data will provide cues on the labor market.
A forex trader said "In the context of how volatile the rupee has been, this has been quite a decent move. Now it's about how much higher we can go."
