The Indian rupee ended little changed on Tuesday as dollar demand from importers pulled the South Asian currency back from the near two-week high it hit during the session.

The rupee closed at 83.3425 against the U.S. dollar, barely changed from its close at 83.3625 in the previous session.

While the local unit rose to a session high of 83.2925, its highest since April 10, it surrendered those gains, pressured by dollar demand from importers, a foreign exchange trader at a state-run bank said.

The dollar index was a touch above 106, while Asian currencies were mixed. The offshore Chinese yuan was down 0.1% at 7.26 to the dollar, while the Korean won and Indonesian rupiah logged mild gains.

The rupee's gains are expected to be capped near 83.00 in the near-to-medium term, said Anindya Banerjee, head of foreign exchange research at Kotak Securities.

Meanwhile, dollar-rupee forward premiums slipped, with the 1-year implied yield down 1 basis point (bp) at 1.66%, pressured by an uptick in near-maturity U.S. bond yields. The 1-year U.S. Treasury yield was up 4 bps at 5.21% in Asia hours.

The rupee has recovered from the record-low of 83.5750 it hit last Friday, aided by likely intervention from the Indian central bank and ebbing concerns about an escalation in the Iran-Israel conflict.

The Reserve Bank of India (RBI) sold around $1.5 billion in the non-deliverable forwards (NDF) market on Friday, when the Middle East flare-up pressured the rupee, Reuters reported.

Now, as those worries ease, the focus is on gauging when the Federal Reserve is likely to begin easing policy rates, with investors keeping a keen eye on U.S. personal consumption expenditure (PCE) inflation data due later this week for further cues.

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