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The Indian rupee was nearly unchanged on Thursday as dollar demand from local oil companies offset positive cues from a decline in U.S. bond yields and on broad weakness in the dollar.

The rupee was at 83.5925 against the U.S. dollar as of 10:45 a.m. IST compared with its close of 83.5825 on Tuesday. Indian financial markets were closed on Wednesday for a local holiday.

The dollar index was up 0.1% after falling to its lowest in four months on Wednesday, pressured by growing hopes of Fed rate cuts and a rise in the Japanese yen on speculation of intervention by the country's authorities.

Most Asian currencies were slightly weaker on Thursday with the Indonesian rupiah down 0.3% and leading losses.

The Indian rupee held its ground when Asian currencies were under pressure earlier in the month so it's unlikely to follow gains in the broad Asia pack either, a foreign exchange trader at a private bank said.

The yen has recovered from the 38-year low hit on July 3 and the offshore Chinese yuan has also risen from its lowest levels since November.

The trader pointed out that dollar demand from local oil companies and other importers has limited gains in the rupee over recent trading sessions.

Meanwhile, dollar-rupee forward premiums rose. The 1-year implied yield touched a 5-month peak of 1.75%, lifted by growing expectations that the Federal Reserve will begin to ease policy rates from September.

The Fed is "getting closer" to a point where it can start cutting interest rates, New York Fed President John Williams said in an interview published on Wednesday.

Growing expectations of rate cuts by the Fed have weighed on the dollar and U.S. bond yields.

"Rupee, expectedly, is underperforming amid broad dollar weakness," FX advisory firm IFA Global said in a note. The currency is likely to trade in a tight 83.40-83.65 range, the note said.