Investors are anticipating the outcome of US debt vote and digesting the latest economic data from China.

The Indian rupee on Wednesday was unmoved by the U.S. dollar's Chinese yuan-fuelled strength, helped by the possible dollar inflows and an important support level. The rupee was at 82.64 against the U.S. dollar by 10:52 a.m. IST, compared to 82.71 on Tuesday. This is despite a further decline in the yuan, which pushed other Asian currencies lower and boosted the dollar against its major peers.

The Indian rupee inched lower on Thursday on risk aversion fuelled by the U.S. debt ceiling worries, but fared better than its Asian peers and continued to hold above a key level. The rupee was last at 82.7425 to the U.S. dollar, down less than 0.1% from the previous session. The rupee has managed to hold above the 82.85-82.95 level over the last three sessions, an important resistance level for the USD/INR pair, according to traders.

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The rupee was last at 82.81 to the U.S. dollar as of 11:03 a.m. IST, against 82.8275 in the previous session. "A stronger U.S. dollar abroad should keep USD/INR under upward pressure," said Anindya Banerjee, head of research - FX and interest rates at Kotak Securities. The unwinding of dovish Fed expectations lent support to the U.S. dollar, OCBC analysts said in a note.

Lower inflation and contraction in manufacturing have hit the yuan but stock markets remain undaunted.

The Indian rupee fell against the dollar to its lowest level in nearly two months on Thursday, tracking a slump in the Chinese yuan, while hopes of an imminent U.S. debt ceiling deal pushed up treasury yields and the greenback. The rupee closed down 0.26% at 82.60 against the U.S. dollar, compared to its previous close of 82.38. "The dollar index is looking positive amid progress on the debt ceiling talks," said Jigar Trivedi, senior analyst at Reliance Securities.

The Reserve Bank of India likely sold dollars via public sector banks after the rupee weakened past 82.50 to the U.S. dollar on Thursday, its lowest in almost two months, three traders told Reuters. The rupee was at 82.4675 to the dollar, having fallen to 82.5575 earlier on worries over cash dollar shortage. "It looks like RBI for decided to step in, which is not a big surprise," a trader at a private sector bank said.

China’s currency weakened to new lows for 2023 on Wednesday, following fresh data on the country's patchy post-Covid economic recovery. The more freely tradable offshore Chinese yuan sank as much as 0.

President Joe Biden is set to meet house speaker Kevin McCarthy.