 "rupee, indian rupee, indian currency")
By Siddhi Nayak and Sethuraman N R
MUMBAI/BENGALURU (Reuters) - The Indian rupee fell for a third straight session on Thursday, weakening to its lowest level in two-and-a-half months, tracking broad losses in Asian peers, but likely dollar sales by the country's central bank capped losses in the currency.
The rupee ended at 82.7225 against the dollar, down 0.2% compared with 82.5825 on Wednesday.
It had fallen to an intraday low of 82.81, the lowest since May 24.
However, the Reserve Bank of India (RBI) likely sold dollars through some state-run banks at 82.75-82.80 rupee levels, preventing a further fall in the rupee, several foreign exchange traders told Reuters.
"Global factors are stacked up against the rupee and a fall to 83 looks pretty much in sight now," said Ritesh Bhusari, deputy general manager for treasury at private sector lender South Indian Bank.
"In case the rupee is able to sustain below 83 convincingly, despite the RBI's intervention, we foresee a fall towards 83.50 in due course," he said.
The rupee will trade in a narrow range over the coming three months and then strengthen slightly in a year as the RBI uses its vast foreign exchange reserves to keep the currency stable, a Reuters poll found.
Most Asian currencies and equities extended losses after a selloff in U.S. equities on Wednesday on risk off fuelled by ratings agency Fitch downgrading the U.S. credit rating. Indian equities also extended Wednesday's losses.
Apart from the U.S. credit downgrade, the jump in U.S. private payrolls also led to a rise in Treasury yields.
The 10-year U.S. yield reached 4.1650% on Thursday, the highest in just under nine months.
The uptick in U.S. yields boosted the dollar. The dollar index reached a near one-month high of 102.84 on Thursday.
Investors are awaiting the Bank of England's policy decision later in the day, and U.S non-farm payroll data on Friday.
(Reporting by Siddhi Nayak in Mumbai and Sethuraman NR in Bengaluru; Editing by Sonia Cheema)
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