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Rupee Upside Seen Capped on Importer Hedging, Oil Prices

MUMBAI, Sept 14 (Reuters) - The Indian rupee was marginally higher on Thursday, with upside on the currency limited by persistent dollar demand from importers and concerns over elevated oil prices.

The rupee was at 82.95 against the U.S. dollar by 11:05 a.m., compared with 82.9850 in the previous session.

"Feel that we're forming a base here (for USD/INR) around 82.85-82.90," said Apurva Swarup, vice president at Shinhan Bank India. Importers are buying on dips and oil companies have been active as well, sustaining pressure on the rupee, he added.

Brent crude futures climbed to a year-to-date high of $92.84 per barrel on Wednesday and last quoted at $92.38 in Asia hours.

Oil output cuts which Saudi Arabia and Russia have extended to the end of 2023 will mean a substantial market deficit through the fourth quarter, the International Energy Agency (IEA) said.

Although (equity) inflows will support the rupee, crude prices will be source of weakness, a foreign exchange trader at a state-run bank said.

The rupee was also barely affected by U.S. core consumer price index (CPI) data, which came in at 0.3% month-on-month compared to an expectation of 0.2%.

Meanwhile, the dollar index weakened 0.17% to 104.56 in Asia trading hours.

Investors will now watch for U.S. initial jobless claims, due later in the day, for further cues on the state of labour market, a key determinant of Fed policy.

Reporting by Jaspreet Kalra; Editing by Varun H K

Source: Reuters

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