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 The Indian rupee, after adjusting for the fiscal year carry cost, was lower versus the U.S. dollar on Wednesday amid higher U.S. yields and dollar inflow expectations.

The rupee was at 82.26 to the dollar at 10:20 a.m. IST, compared with 82.1875 in the previous session. The spot date for USD/INR changed from March 31 to April 3, the next fiscal year.

There is a higher carry return for holding short dollar positions for the shift and the rupee's decline at open has adjusted for that, a trader said.

The higher opening should "not have much legs" with speculators wary of possible dollar inflows related to the

Asian currencies were mixed on the day amid a rise in U.S. yields. The abating worries around the U.S. banking sector have prompted traders to re-look at their expectations on the Federal Reserve's rate path.

The expectations on the extent of rate cuts have mellowed.

At the height of the turmoil, traders had priced in rate cuts worth more than 200 basis points, from the peak, by December 2024. That has now fallen to 164 bps, according to DBS Research.

Further, the odds of whether the Fed will opt for a rate hike or hold fire at its meeting in May is now almost a coin toss.

The 2-year U.S. yield is now well off last week's lows, yet the dollar has not rallied against its major peers.

The tepid dollar index despite the rise in U.S. yields suggests that the "undercurrent of safe haven demand is missing", said Amit Pabari, managing director at CR Forex.