MUMBAI: The Indian rupee may dip to an all-time low at open on Wednesday ahead of important US inflation data and new interest rate forecasts by Federal Reserve officials.

Non-deliverable forwards indicate the rupee will open at 83.58-83.60 to the US dollar, compared with 83.5650 in the previous session and past the lifetime low of 83.5750 hit in April.

The rupee on Tuesday dropped past the long-held support of 83.50-83.55.

“The way it has been, it is always unexpected when you see a move beyond the set range,” a currency dealer at a bank said.

“These range breakouts, however, have not amounted to big moves and I think that scenario will play out again.”

The Reserve Bank of India may intervene in the non-deliverable forward (NDF) market before the market opens, like it has done in the past, to prevent the rupee from slipping to a new low, he said.

The dollar index’s strength amid doubts about whether the Fed will cut rates later this year is weighing on the rupee and other Asian currencies.

The US central bank is widely expected to announce no changes to the policy rate later in the day and at the next meeting in July.

Policymakers will be putting out their new interest rate projections.

A hawkish tone could also be reflected in the Fed’s projections, HSBC Bank said in a note.

Indian rupee ends moderately higher

The median 2024 estimate may rise to imply only 25bps or 50bps worth of cuts this year compared with 75bps last time and there may be an increase in its ‘longer-run’ dot to 2.7%, it said.

The May US consumer inflation data will be out before the Fed’s policy decision.

The May numbers are still set to show underlying stickiness, which has kept the Fed on the cautious side, HSBC said. Economists polled by Reuters expect core inflation to rise 0.3% month-on-month.