MUMBAI, July 11 Reuters The Indian rupee was nearly unchanged on Thursday, lagging most of its Asian peers, which were lifted by a dip in U.S. bond yields.

The rupee was at 83.5025 against the U.S. dollar as of 1020 a.m. IST, barely changed from its previous close at 83.52. The currency hovered in a tight 83.5083.51 band in early trading.

Mostly rangebound movement in the rupee over the last few trading sessions has also pushed volatility expectations lower with the 1month implied volatility dropping to 1.65, the lowest since March 7.

The dollar index dipped below 105 while most Asian currencies rose, with the Korean won up 0.3 and leading gains, ahead of closely watched U.S. inflation data due later in the day.

The data is expected to shape expectations of when the Federal Reserve may begin easing policy rates. Interest rate futures are currently pricing in a 73 chance of a September rate cut, according to CME39;s FedWatch tool.

We currently see a twoway risk to US inflation, with tighter monetary conditions and softer labour market bringing inflation down more, while the upside risks stem from geopolitical tensions, Lloyd Chan, a senior currency analyst at MUFG Bank, said in a note.

Economists polled by Reuters have forecast monthonmonth core U.S. CPI holding steady at 0.2 in June.

Traders expect the rupee to hover between 83.45 and 83.55 during the day39;s session with routine importer dollar demand hurdling gains for the currency.

In addition to the U.S….