The Indian rupee is anticipated to experience a marginal decline in the opening session on Wednesday, influenced by the strengthening U.S. dollar following robust U.S. labor market data, which has diminished the likelihood of a Federal Reserve interest rate cut in March. Non-deliverable forwards suggest that the rupee may open at approximately 83.12-83.14 against the dollar, a slight shift from the previous session's 83.1050.

Over the past four sessions, the intraday range of the rupee has fluctuated within a narrow band of 2 to 6 paisa. According to a forex trader at a bank, the rupee seems to be in a state where minimal changes are anticipated. The initial drop is not expected to be significant, and the maximum movement might reach 83.18.

The probability of a Fed rate cut in March has diminished to 44%, primarily due to unexpected increases in U.S. job openings in December and upward revisions of data from the preceding month, indicating the resilience of the labor market. Additionally, the U.S. headline Conference Board consumer confidence has reached a two-year high.

A month earlier, investors were highly certain about the initiation of a Fed rate-cut cycle in March. However, subsequent data revealing the robust performance of the U.S. economy and labor market has tempered these rate-cut expectations. ING Bank noted that the market has further discounted the chances of a March rate cut ahead of the Federal Open Market Committee (FOMC) meeting.

While the Fed is expected to maintain the policy rate at the upcoming meeting, the focus will be on Chair Jerome Powell's statements regarding the potential March rate cut. In the Asian trading session, the dollar index exhibited strength, leading to a decline in Asian currencies ranging from 0.1% to 0.5%. Simultaneously, Asian shares and S&P 500 Index futures registered a decline.