By Sethuraman N R
BENGALURU, June 14 (Reuters) - The Indian rupee hit a fresh high on Wednesday, but traders were holding off positional moves ahead of the U.S. Federal Reserve rate decision due later in the day.
The rupee was trading at 82.2875 to the dollar by 10:57 a.m. IST, after closing at 82.3675 in the previous session. The domestic currency hit its highest since June 2 at 82.2725.
The U.S. inflation data on Tuesday reaffirmed views that the Federal Reserve will likely keep interest rates unchanged in June.
There is some weakness in the dollar index, but there would not be much action before the Fed's decision even though the USD/INR pair is more "tilted towards left," a forex trader with a private bank said.
Post the CPI data, the odds of a Fed rate hike in June have fallen to 8% from 25% on Tuesday.
The dollar index hovered close to an over three-week low hit on Tuesday, while the two-year U.S. yield dropped slightly in Asia after rising to its highest since March 10.
Most of the Asian currencies were weak, while the risk sentiment was buoyed by expectations of a Fed rate pause.
Meanwhile, the USD/INR broke a technical support at 82.30.
The pair is eyeing another minor support at 82.25 even though indicators pointed towards weaker momentum, said Dilip Parmar, research analyst at HDFC Securities.
The rupee forward premiums declined with the 1-year implied yield down to 1.72%. (Reporting by Sethuraman NR in Bengaluru)