Rupee Strengthens Amid Positive Asian Currencies Trend

The Indian rupee is expected to open slightly higher on Wednesday, supported by gains in other Asian currencies. Non-deliverable forwards suggest an opening around 83.31-83.32 against the U.S. dollar, a tad stronger than the previous close of 83.3425. Asian currencies, including the Korean won, saw increases ranging from 0.1% to 0.6%. A foreign exchange trader noted that the rupee might test 83.20 today due to a 'risk-on' sentiment prevailing in the market.

However, importers looking to hedge their positions could cap the rupee's gains. The dollar index slipped to 105.63, down nearly 0.4% on Tuesday following weaker U.S. business activity data for April. Despite this, expectations of solid U.S. GDP figures on Thursday and PCE inflation data on Friday are likely to support the dollar around the 105 mark.

Investors are closely monitoring these upcoming economic indicators to assess the possibility of Federal Reserve rate cuts. The focus has shifted from Middle East tensions to U.S. economic data, with analysts anticipating a 0.3% month-on-month increase in core PCE prices for March. Brent crude oil prices climbed 1.6% on Tuesday, driven by dollar weakness and positive euro zone business activity reports indicating robust expansion in April.