MUMBAI, Dec 28 Reuters The Indian rupee is expected to open higher on Thursday following a further slide in the U.S. dollar on bets the U.S. central bank will most likely cut interest rates in the next quarter.

Nondeliverable forwards indicate the rupee will open at around 83.2683.28 to the U.S. dollar, compared with 83.3450 in the previous session.

USDINR had its best day in nearly three months on Wednesday, likely related to monthly currency futureslinked dollar demand, traders said.

For once, there was a decent move on one side, and now it looks like it will be snuffed out, an fx spot trader said.

I think the opening dip on USDINR will see a bit of buying, and offers will pick up in the afternoon.

Asian currencies rose and the dollar index added to the fall during the Europe and U.S. trading sessions on Wednesday. The dollar index, marred by expectations of aggressive rate cuts by the Fed, has lost 2.5 this month and is at the lowest since July.

There is mounting confidence that the Fed will be cutting interest rates in the first quarter of 2024. The odds of a rate cut at the March meeting is now more than 80 and there is a 1in6 likelihood of one in January.

A few analysts think that expectations of investors around rate cuts are likely misplaced.

We believe that the market expectation of 56 cuts next year are too aggressive given the current health of the U.S. economy, said Srinivas Puni, managing director at QuantArt Market Solutions.

New Year data…