MUMBAI, June 13 (Reuters) - The Indian rupee was little changed on Tuesday, while forward premiums dropped ahead of the highly anticipated U.S. inflation data.
The rupee was quoting at 82.4250 to the dollar by 10:42 a.m. IST, largely unchanged from the previous session's 82.43.
Data due Tuesday is expected to show that the U.S. core inflation rate rose 0.4% on-month, well above the pace that is required to bring back inflation to the Federal Reserve's medium-term target.
"Any significant deviation from consensus can trigger some outsized moves," Srinivas Puni, managing director at QuantArt Market Solutions, said.
"If the inflation prints are in line, markets will be relieved and INR could see a mild appreciation in expectation of a pause by the Fed."
The Fed's interest rate decision is due Wednesday. A pause by the U.S. central bank is the base case, according to Fed futures, but is not an absolute certainty. Futures reckon that there is a 25% chance of a rate hike.
Risk assets are doing well ahead of the data, suggesting that traders are not too worried about the inflation print. The S&P 500 index rose 1% overnight. Futures on the U.S. gauge were higher in Asia.
U.S. yields were marginally lower and the dollar index dropped to 103.44. Asian currencies were mixed with the offshore Chinese yuan seeing new 2023 lows, while the Korean won rallied more than a percent.
Rupee forward premiums declined with the 1-year implied yield down to 1.72% on back of the lower-than-expected reading on the Indian consumer inflation print. (Reporting by Nimesh Vora; Editing by Sohini Goswami)
