Indian Rupee Closes Stronger Against U.S. Dollar

The Indian rupee closed stronger against the U.S. dollar on Wednesday.

The local currency strengthened 8 paise to close at Rs 83.04 against the U.S dollar, after opening at Rs 83.15.

During the day, it strengthened12 paise to Rs 82.99, the highest in three weeks. It closed at Rs 83.12 on Tuesday, according to Bloomberg data.

"Rupee remained boxed in a small range of Rs 83.03–83.13 on Tuesday as RBI brought dollars and FPIs and others sold. It is expected to maintain its range for the moment between Rs 83 and Rs 83.30 for the day as risk aversion keeps the dollar in the limelight," said Anil Kumar Bhansali, head of Treasury and executive director at Finrex Treasury Advisors LLP.

"The upcoming U.S. CPI and PPI data releases this week will be pivotal for the Federal Reserve's rate cut decisions. Stronger-than-expected CPI and PPI could boost the U.S. dollar index and potentially delay a rate cut, while weaker data might lead to a bearish DXY, prompting discussions of an early rate cut by the Federal Reserve," Amit Pabari, managing director at CR Forex Advisors, said.

"These data points will significantly impact market expectations and the Fed's policy direction," Pabari said.