MUMBAI: The Indian rupee is expected to consolidate at open against the US dollar on Thursday, after falling below the important near-term support level of 82.20 in the previous session.

The non-deliverable forwards indicate the rupee will open at around 82.20-82.25 to the US dollar compared with 82.2250 on Wednesday. The rupee declined for the third straight session on Wednesday, bogged down by the cash and hedging dollar demand and higher US yields, according to traders.

“It is sort of a surprise that we have managed to reach the 82.20 level. We were betting on a 81.80 to 82.20 immediate range,” a spot dealer at a private sector bank said.

USD/INR will see a quiet open with traders assessing whether the up move “will stick” and likely to move higher in the afternoon, he said.

Other Asian currencies like the Chinese yuan and the Korean won weakened on Thursday, impacted by another move up in US yields. T

he 2-year US yield overnight reached 4.28%, the highest level since mid-March.

Indian rupee falls more on likely importer hedging, higher US yields

Higher-than-expected inflation in Britain and possibility that the Federal Reserve could keep hiking interest rates weighed on demand for US bonds.

UK’s inflation data triggered a re-pricing higher across developed market yields, DBS Research said in a note.

“While inflation dynamics differ across countries it is still a reminder that price pressures linger.”

Fed funds futures traders are pricing in a 90% probability the Fed will hike rates by an additional 25 basis points at its May 2-3 meeting.

Further, odds that there could be another 25 basis points increase in June have been rising.

The dollar overnight rose against a basket of its major peers.

Risk appetite was weak with most Asian gauges and US equity futures lower.