BENGALURU, June 14 Reuters The Indian rupee is expected to open higher on Wednesday after U.S. inflation data reaffirmed views that the Federal Reserve will likely keep interest rates unchanged in June.

Nondeliverable forwards indicate the rupee will open at around 82.2282.24 to the U.S. dollar, compared with 82.3675 in the previous session.

The consumer price index CPI showed an annual increase of 4 in May, slowing from 4.9 in April.

Data earlier this month offered a mixed picture of the U.S. labor market, while some Fed officials have called for a pause. 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 threeweek low hit on Tuesday, while the twoyear U.S. yield dropped slightly in Asia after rising to its highest since March 10.

We think it will be a hawkish pause as the Fed emphasizes that the hiking cycle might not be done. Whether the pause turns into a skip will depend on incoming data, DBS analysts said in a note.

The risk sentiment remained robust, with the SP 500 and Nasdaq reaching their highest closes in 14 months on Tuesday.

Meanwhile, the offshore Chinese yuan remained under pressure against the dollar after dropping to a new low since November on Tuesday.

Reporting by Sethuraman NR in Bengaluru; Editing by Sonia Cheema

Source Reuters