MUMBAI, July 16 (Reuters) - The Indian rupee was nearly unchanged on Tuesday as exporter dollar sales supported the currency even as most of its Asian peers declined amid a rise in long tenor US bond yields.
The rupee was at 83.5750 against the U.S. dollar as of 09:45 a.m. IST, barely changed from its close at 83.5925 in the previous session.
The dollar index was slightly higher at 104.3 after rising 0.2% on Monday, as long-dated Treasury yields were lifted by heightened odds of Donald Trump winning the U.S. presidential election in November.
Asian currencies were mostly weaker with the Thai baht down 0.2% and leading losses. The Chinese yuan, a closely watched peer of the rupee, also weakened slightly.
Dollar sales from exporters helped support the rupee in early trading, a foreign exchange trader at a state-run bank said. "The expectation is that the RBI should protect against weakness below 83.65," the trader added. The rupee had hit its record low of 83.6650 on June 20.
Routine interventions from the Reserve Bank of India have kept the rupee in a tight range with the currency with the currency's 1-year realised volatility dropping to an all-time low of 2.17%.
"The Indian rupee is currently caught in a tug-of-war between negative and positive forces, trading within a tight range," Amit Pabari, managing director at FX advisory firm CR Forex said.
Meanwhile, dollar-rupee forward premiums nudged higher with the 1-year implied yield up 1 basis point at 1.70%, supported by heightened expectations that the Federal Reserve will begin to ease policy rates in September.
Federal Reserve Chair Jerome Powell said on Monday that recent data added "somewhat to confidence," that inflation is moving to the 2% target. (Reporting by Jaspreet Kalra; Editing by Nivedita Bhattacharjee)
