The rupee closed lower against the dollar on Wednesday ahead of the US Federal Reserve's meeting, with the market expecting rates to be kept unchanged.
The local currency depreciated nearly 2 paise to close at an all-time weakest level of 83.402 against the U.S. dollar on Wednesday. It closed at 83.39 on Tuesday, according to Bloomberg data.
On Tuesday, India's retail inflation picked up in November, led by a rise in the prices of vegetables and pulses, but stayed within the central bank's tolerance band.
The Consumer Price Index-based inflation stood at 5.55% in November as compared with 4.87% in October, according to data from the Ministry of Statistics and Programme Implementation.
"US November CPI fuelled dovish bets on the Fed. Powell will likely maintain a cautious tone without considering rate cuts and neither a victory on inflation," Kunal Sodhani, vice president of Shinhan Bank, said.
"However, markets will scrutinise the dot plot to see how FOMC staff project 2024. DXY finding resistance at 104.30. Brent crude prices cooled off. For USDINR, 83.30 acts as a support while 83.50 a resistance," Sodhani said.
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