MUMBAI, Dec 15 Reuters The Indian rupee declined against the U.S. currency on Thursday on the dollar39;s recovery against its major peers and weak Asian cues, and forward premiums rose to the highest level this month.

The rupee last traded at 82.76 to the dollar, down from 82.46 in the previous session. Dollar sales by a large foreign bank had briefly lifted the local currency to near 82.40, according to traders.

The dollar index climbed 0.6 to 104.28, boosted by the U.S. Federal Reserve39;s interest rate forecasts and poor risk appetite. Futures pointed to losses for the SP 500 Index, while European and Asian equities declined. Indian equities had their worst day since midOctober.

The Fed raised rates by 50 basis points bps to 4.254.5 and the median dot showed rates would rise to 5.125 at end2023, up from 4.625 in September.

The distribution of the 2023 dot plot was skewed to the upside with only two dots below 5.125 and seven dots above it, Bank of America Merrill Lynch said in a note.

Market expectations, however, forecast that the Fed rate was likely to top out at around 4.755 around midnext year and would be followed by rate cuts.

The euro and the U.K. pound weakened against the dollar ahead of rate decisions from the European Central Bank and the Bank of England.

Meanwhile, the 1year USDINR forward premium reached 2 for the first time this month. The 1year premium had opened a tad lower but reversed course on paying interest sellbuy swaps from staterun banks,…