MUMBAI: The Indian rupee is expected to on Thursday take support from rising expectations the Federal Reserve will deliver a half-percentage-point rate cut at this month’s meeting and the resolute defence of a key level by the central bank.

The 1-month non-deliverable forward indicated that the rupee will open marginally higher to the US dollar from 83.9650 in the previous session.

The rupee on Wednesday managed to avert dipping past the all-time low of 83.9725 thanks largely to intervention by the central bank.

The Reserve Bank of India was selling dollars via public sector banks at 83.97 on Wednesday.

“RBI looks determined to not allow a move past 84. And with downside (on dollar/rupee) looking limited for now, the rangebound behaviour will continue,” a currency trader at a bank said.

The rupee will receive help from the dollar’s decline on expectations of a dovish Fed.

Odds that the Fed will opt for a larger 50 basis point rate cut at the Sept. 17-18 meeting climbed to 46% amid weak US labour data.

US job openings dropped to a 3-1/2-year low in July.

Indian rupee to remain mired near all-time low on global risk aversion

Data related to the US labour market is drawing extra attention after Fed Chair Jerome Powell signalled that policymakers were increasingly worried about it.

More data is on the way on Thursday with the ADP private payrolls numbers and the initial jobless claims print up for release.

The most important August non-farm payrolls data is due on Friday.

Of particular interest in the non-farm payrolls report will be the unemployment rate, which rose to 4.3% in July, ANZ Bank said in a note.

US Treasury yields declined on Wednesday, with the 2-year at its lowest since September 2022.

The fall in yields weighed on the dollar index, boosting Asian currencies.