Rupee logs 3-day winning run ahead of key US inflation print

MUMBAI, July 12 (Reuters) - The Indian rupee rose for a third consecutive session on Wednesday as the dollar continued its slide ahead of U.S. inflation data that could potentially support bets of the Federal Reserve not hiking interest rates beyond July this year.

The rupee ended at 82.2475 against the dollar at 3:30 p.m. IST, after closing at 82.3650 on Tuesday. The currency has risen 0.6% so far this week.

The weeks gains in the rupee have somewhat restored confidence among domestic players on the currency, said Jayram Krishnamurthy, co-founder of Almus Risk Consulting.

The dollar index slipped to a fresh two-month low of 101.33 on Wednesday, while U.S. yields extended their declines ahead of data that is expected to show that both headline and core U.S. consumer price index rose 0.3% month-on-month in June, per a Reuters poll.

On a year-on-year basis, the headline CPI is expected to have climbed 3.1%, slower than a 4% rise in May.

\“Assuming no nasty upside surprises here, this may be enough to firm up a view that a 25 bps (basis points) Fed hike may well be the last in the cycle,\” ING Bank said in a note.

Markets have factored in a 25-bps rate hike at its July meeting, but analysts are doubtful if the U.S. central bank would hike rates beyond that.

Fed officials have, however, indicated that one more rate hike after July could be needed.

Most Asian currencies rose 0.1% to 0.4% against the dollar ahead of the data.

Indias June inflation data, also due Wednesday, is expected to have risen 4.58% on-year from 4.25% in May, according to a Reuters poll.

Rupee forward premiums were mostly unchanged before the U.S. and India data. The one-year implied yield ended one bps lower at 1.63%.

Reporting by Siddhi Nayak; Editing by Sohini Goswami

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