MUMBAI: The Indian rupee edged higher as the dollar index tumbled on positive risk sentiment after minutes of the US Federal Reserve’s November meeting reaffirmed the likelihood of smaller-sized rate hikes. The partially convertible rupee ended at 81.63 per dollar against its previous close of 81.8450. It held a narrow 15-paisa range throughout the session. A break below 81.67 for the dollar/rupee pair signals that the 81.55 level could be attained, but it could be challenging as importers seem to be bidding around those levels, said a trader with a private bank. The rupee’s range in the near term could be 81.40-81.90 per dollar due to a lack of major triggers leading up to the Reserve Bank of India (RBI) meeting on December 7, said Gaurang Somaiya, FX and bullion analyst at Motilal Oswal Financial Services. Risk assets rallied in Asia as the Malaysian ringgit , the Thai baht and the South Korean won surged between 1% to 1.8%, while most stock markets soared, with Indian shares hitting a record high. The dollar index slipped further to 105.9 to hover near a three-month low, having declined 1% overnight. Weak US data, coupled with minutes of the Fed’s November meeting showing that officials were largely satisfied they could begin moving in smaller steps, weighed. While this could be the beginning of a more sustained weakness in the dollar index, and in US yields eventually, this path will be marred with volatility, HDFC Bank economists wrote in a note. “For Indian importers, the combination of the spot below 81.50 and decadal low forward premiums provide attractive opportunities to hedge,” they said. The dollar/rupee 1-year implied yield has touched an 11-year low, but is expected to adjust up to 3-3.5%. However, “this move will not come before the middle of 2023 and near-term weakness is likely to continue,” the economists added.