Indian rupee lags behind Asian peers as foreign banks' dollar bids weigh

Rupee ended nearly flat at 85.6375 vs USD, trailing Asian peers due to strong local dollar demand from foreign banks.

Other Asian currencies rose 0.1%-0.6% as the dollar index dipped amid U.S. fiscal worries and trade talk uncertainties.

Strong dollar demand driven by corporate payments and portfolio outflows kept rupee under pressure despite global EM currency strength.

Traders eye Fed comments, G7 updates, and U.S. tax-cut bill developments; 1-year forward premium hit 2-month low at 2.02%.