MUMBAI, Oct 10 (Reuters) - The Indian rupee is likely to open marginally higher on Tuesday after a pullback in U.S. Treasury yields fuelled a broad uptick in Asian peers.
Non-deliverable forwards (NDF) indicate the rupee will open at around 83.22-83.24 to the U.S. dollar compared with 83.2625 in the previous session. The currency is hovering just shy of its record low of 83.29.
Though NDFs indicated a positive opening for the rupee, it was "absolutely possible" that the local currency could see a new lifetime low, a forex trader at a large private sector bank said.
He pointed to the USD/INR NDF's rise in the New York session after a rally in oil prices.
The 1-month NDF reached a high of 83.48 in the New York session, implying a spot price of 83.36. Brent crude climbed more than 4% on Monday to almost $88 following the conflict in the Middle East.
Asian currencies pushed higher on Tuesday, with the Chinese yuan strengthening to 7.28 to the dollar. U.S. Treasury yields, resuming trade following the extended weekend, declined.
The 2-year yield was down more than ten basis points at 4.96% and the 10-year dropped to 4.64% on safe haven demand and slightly dovish comments by Federal Reserve officials.
Fed Vice Chair Philip Jefferson and Dallas Fed president Lorie Logan both noted on Monday that the recent run-up in yields may reduce the need for further interest rate hikes.
The odds of a Fed rate hike at the November meeting are down to just 12%.
"Unless the September (U.S.) CPI (consumer price index) is very strong, we see no reason for the FOMC (Federal Open Market Committee) to rush into a November hike," ANZ said in a note.
The U.S. CPI data is due on Thursday.
KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.32; onshore one-month forward premium at 11.75 paisa ** USD/INR NSE October futures settled on Monday at 83.3425 ** USD/INR October forward premium is at 7 paisa ** Dollar index at 105.98 ** Brent crude futures at $88.1 per barrel ** Ten-year U.S. note yield at 4.64% ** As per NSDL data, foreign investors bought a net $32.5mln worth of Indian shares on Oct. 6
** NSDL data shows foreign investors bought a net $121.5mln worth of Indian bonds on Oct. 6
(Reporting by Nimesh Vora; Editing by Nivedita Bhattacharjee)
