MUMBAI: The Indian rupee rose against the dollar on Thursday, as Asian currencies made some headway following losses fuelled by worries over rising U.S. yields.

The rupee finished at 82.7325 per dollar, compared with 82.85 in the previous session, which was its weakest closing level so far this month.

The currency has traded in an about 30 paisa range for the past 10 days even as other Asian currencies marked deep losses. Traders reckon the Reserve Bank of India’s (RBI) presence helped the rupee outperform its peers.

Indian rupee drops, but stays within familiar narrow range

“A convincing breach of the 82.50 level would indicate if we’re out of the narrow trading range,” said Sajal Gupta, head of forex and rates at Edelweiss Securities.

“Forex reserves are not a big concern at this point. So on the upside (in the USD/INR), we think the RBI could keep protecting the 83-level.”

The South Korean won and the Philippine peso firmed about 0.3% on Thursday after the dollar index dipped and U.S. bond yields fell as the minutes of the Federal Reserve’s Jan. 31-Feb. 1 meeting were considered “outdated.”

The Fed raised rates by 25 basis points (bps) at that meeting and the minutes noted that almost all participants preferred that to a 50 bps hike.

But since the meeting, there has been a series of inflation and economic data that surprised the market and led to a repricing of a higher Fed terminal rate.

Markets are now expecting at least two more rate hikes, with a growing possibility of a third one and the rate topping out around 5.362% in July.

This has turned investors bearish on all Asian emerging market currencies, with short bets on the rupee hitting a three-month high, a fortnightly Reuters positioning poll showed.