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The rupee has lost its key support. Exporter activity, inflows and exports limit losses.

The Indian rupee fell past a crucial support level to reach a three-week high on Thursday, despite a stronger dollar and exporter dollar sales. Portfolio inflows also helped limit the rupee's losses.

The rupee was down at 86.0750 against U.S. dollars from the close of 85.94 the previous session.

The rupee fell below the 86-mark at the beginning of the day but then sank to a low 86.09 by the end of the session.

The rupee suffered less damage as the dollar strengthened, even though Asian currencies weakened by 0.1% to 0.4%.

Dollar index rises 0.4% to 987 as traders assess Donald Trump's comments about the future of Fed Chair Jerome Powell. Meanwhile, concerns over an important election in Japan drive the yen down by 0.5%.

The dollar index swung on Thursday. It initially dropped on speculation that Trump will sack Powell before reducing losses when the report was denied.

Trump's denial led to a unwinding of market movements. The markets' resistance to the headlines which have characterized Trump's first term is evident.

The M regional stock market was in the black on Thursday despite India's benchmark equity indices, the BSE Sensex, and Nifty 50, ending down by around 0.4% each.

Investors are now awaiting the release of U.S. Retail Sales data for June, and remarks by Federal Reserve policymakers in the late afternoon.

These remarks will likely be in the spotlight, given Trump's criticism of Powell almost every day for not lowering rates. (Reporting and editing by Jaspreet K. Kalra)

(source: Reuters)