Non-deliverable forwards indicate the rupee will open at 83.97-83.99 to the U.S. dollar, slipping past Monday's close and lifetime low of 83.8450.
The 1-month dollar/rupee NDF climbed to 84.25 overnight amid worries over the fallout of the unwinding of the Japanese yen carry trade. The 1-month had retraced a part of its up move and was last at 83.06/83.08.
The upward pressure on dollar/rupee in the NDF market and broadly is "quite evident", a currency trader at a bank said.
The rupee's losses on Monday would have been larger had it not been for the Reserve Bank of India dollar sales in the onshore over-the-counter market.
In the onshore over-the-counter market, "you have higher level the comfort" of the Reserve Bank of India intervention relative to the NDF market, the trader pointed out.
The RBI has, in the past, intervened in the NDF market just before onshore OTC open to cool off the dollar/rupee spot and "that is likely again today", a forex dealer at a foreign bank said.
Asian shares recovered from Monday's selloff fuelled by worries of a U.S. recession. The in-focus Japan's equity gauge was up about 10%, U.S. equity futures advanced and Indian equities were poised to open higher.
Risk assets were supported by assuring comments by a Federal Reserve official that a weak July jobs report did not indicate a recession and a robust U.S. services data print.
Stabilisation signs are emerging, ING Bank said in a note.
The U.S. services report suggests the situation "looks ok" with the economy growing, adding jobs and with inflation above target, James Knightley, chief international economist, US at ING Bank said.
Investors are now pricing in 110 basis points of rate cuts by the U.S. Federal Reserve this year, having reached 125 bps at one point on Monday.
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