The Indian rupee is expected to move up at open on Tuesday on back of an uptick on most Asian peers and equity inflows.

Non-deliverable forwards indicate the rupee will open at around 81.90-81.92 to the U.S. dollar, compared with 81.9575 in the previous session.

The rupee on Monday reached a near two-month high of 81.75 on dollar offers by foreign banks, which market participants said was likely related to their custodial clients and to a one-off inflow.

The local currency, however, surrendered most of its up move on dollar buying by public sector banks, mostly for the Reserve Bank of India (RBI).

“The initial excitement that we will finally see a decent move (on USD/INR) fizzled out by the time the day was over,” an FX spot trader said.

The RBI has “again established” that it would rather not see rupee appreciate significantly from current level, he added.

Asian currencies were mostly higher on Tuesday, not impacted by the a further uptick in U.S. yields. The 2-year U.S. yield climbed to 4.96% in Asia trading, its highest since March.

U.S. yields had dipped overnight following the weak U.S. manufacturing data, but reversed course later.

The Institute for Supply Management said that its U.S. manufacturing PMI dropped to 46.0 last month, the lowest reading since May 2020, from 46.9 in May. The reading marked the eighth straight month below 50, indicating a contraction.

Focus in Asia on Tuesday will be on the Reserve Bank of Australia (RBA) rate decision in view of the broadly hawkish tone of central banks of major economies.

“We expect a 25 basis points hike in the cash rate from the RBA today, but the decision will be finely balanced,” ANZ said in a note. The annual headline inflation decelerated in May, but underlying measures were less encouraging, it said.