The Indian rupee ended marginally lower against the dollar on Thursday as risk appetite in the region weakened and as crude oil prices resumed their uptrend.
The rupee ended at 83.3525 to the dollar, down from 83.3250 in the previous session. The local unit traded in a narrow four-paisa range during the day.
Risk appetite in the region weakened, with equity gauges of Japan and Hong Kong slipping at least 0.7%. Indian equities pulled back, while Asian currencies were mostly lower.
Oil prices also edged higher, with the benchmark Brent crude oil contract hovering near $75 per barrel, after falling nearly 4% on Wednesday. Demand concerns have prompted a near-10% decline in Brent so far this month.
The 10-year U.S. Treasury yield edged up to 4.15%. The yield had dipped to 4.10% on Wednesday after U.S. private payrolls rose less than expected, indicating the U.S. labour market was cooling.
Investors will be looking for more cues on the U.S. labour market when the key monthly jobs report is out on Friday.
The data is expected to show 180,000 job additions in November, according to economists polled by Reuters.
Meanwhile, the rupee forward premium inched up, with the 1-year implied yield rising to 1.64% a day ahead of the Reserve Bank of India's monetary policy decision.
The central bank is widely expected to hold the repo rate at 6.50% for a fifth consecutive meeting, according to a Reuters poll. With global central banks looking to ease rates and cooling oil prices, the RBI may signal a mildly dovish stance at Friday's meeting, potentially pressuring the rupee, said Arnob Biswas, head of foreign exchange research at SMC Global Securities.
The rupee can edge towards a new lifetime low around 83.50 in the coming sessions, Biswas added. (Reporting by Siddhi Nayak; Editing by Sohini Goswami)