MUMBAI: The Indian rupee is expected to open flat on Friday and remain in a narrow range, caught between the Asian nation’s December quarter growth, which exceeded expectations, and the upmove in the dollar index.

Non-deliverable forwards indicate the rupee will open little changed from 82.9125 in the previous session.

The domestic currency has been in a less then ten paisa range this week on likely dollar buying by the central bank, on one hand, and inflows on the other.

The rupee’s range this week “has probably been squeezed more, if that was possible”, an FX trader at a bank said.

“While one can talk about India GDP and US inflation numbers, they hardly matter” from the rupee’s point of view, the trader said.

India’s economy grew at its fastest pace in one-and-half years in the December quarter, blowing past expectations and supporting the view among several market participants that the rupee’s medium-term outlook is positive.

Meanwhile, the dollar index rose on Thursday following a choppy session.

Indian rupee awaits key US inflation data, bias on upside

The Fed’s favoured measure of inflation supported bets that the US central bank will not cut rates at its March or May meeting.

The US personal consumption expenditures (PCE) price index rose 0.3% last month, in-line with expectations. The core PCE increased 0.4%.

The data follows the higher-than-forecast print for US January consumer inflation data.

“Given the recent performance of US data, the fear was we could get yet another upside surprise,” ING Bank said in a note.

While Thursday’s number “in itself is too hot” for the Fed to contemplate an imminent rate cut, “we have to acknowledge that for six out of the past eight months, we have been tracking below the 0.17% month-on-month rate we need to consistently hit to bring annual inflation back to 2% over time”, ING said.