MUMBAI, July 19 (Reuters) - The Indian rupee declined on Wednesday on the back of a Chinese yuan-led slide in Asian peers, while forward premiums inched lower.
The rupee was at 82.0800 to the U.S. dollar by 11.07 a.m. IST, down from 82.03 on Tuesday.
The offshore yuan slipped below 7.2150 versus the dollar, headed for its fourth daily decline on worries over China's growth outlook. At least four brokerages have downgraded forecasts for China's 2023 GDP this week.
The USD/CNH pair is resuming its upward movement and this can "significantly impact" other Asian currencies, including the rupee, said Anindya Banerjee, head of research - FX and interest rates at Kotak Securities.
"However, the rupee may find support from robust FPI (foreign portfolio investment) inflows. The result - USDINR is expected to trade within a range of 81.90 to 82.22/25 levels."
Foreign investors have poured more than $4 billion into Indian shares so far this month, according to NSDL data. Indian equity gauges are at record highs.
The dollar index inched up to 100.04. U.S initial jobless claims data is due on Thursday, which will help investors gauge whether the labor market continues to hold up. The Federal Reserve rate decision is next week.
Following the U.S. inflation data, markets expect the Fed to deliver a 25 basis rate (bps) hike next week, followed by a prolong paused.
Expectations that the Fed is near the end of its rate hike cycle has helped risk assets. Near-maturity U.S. yields are off recent highs.
Rupee forward premiums were down on the day with the 1-year implied yield off two bps. Following last week's jump, premiums have been fairly rangebound this week. (Reporting by Nimesh Vora; Editing by Sonia Cheema)
