MUMBAI, July 11 Reuters The Indian rupee was trading higher against the U.S. currency on Tuesday, tracking an advance in its Asian peers.

The rupee was trading at 82.3600 against the dollar at 1030 a.m. IST against 82.5650 in the previous session.

We anticipate speculators liquidating their long dollar positions built last week, with exporters joining in for hedging purposes, said Anindya Banerjee, head research FX and interest rates at Kotak Securities.

Unless the Reserve Bank of India takes aggressive action to buy dollars, there is a high possibility of the rupee strengthening to around 82.1582.20 on spot, Banerjee said.

The Korean won led Asian currencies higher, while risk appetite in the region firmed up amid a drop in the dollar index.

The dollar index dropped to a twomonth low of 101.73 in Asia trading on Tuesday, extending Monday39;s fall. The fall in the dollar index was largely attributed to a decline in U.S. yields.

The twoyear U.S. yield was down to 4.8515, off the recent high of 5.12, ahead of the U.S. inflation data due on Wednesday. The 10year yield also dropped below 4 in Asia trading on Tuesday.

Investors assessed comments Federal Reserve officials made on Monday, which indicated that additional interest rate hikes were needed to bring down stillhigh inflation, but that the end to the U.S. central bank39;s current monetary policy tightening cycle was closer.

Traders expect the Fed to raise interest rates by 25 basis points bps this month, but…