MUMBAI, Aug 10 Reuters The Indian rupee was little changed on Thursday before the Reserve Bank of India39;s policy decision, which will be followed by the vital U.S. inflation data.

The rupee , similar to how it has been over the last two days, was in a narrow range. The currency was nearly unchanged from 82.8150 on Wednesday and the 10day realized volatility is now back below 3. It has been in a 14 paisa range so for this week.

Just hoping for a tradeable move on either side, though honestly speaking, the room for surprise on both RBI and U.S. inflation is quite low, a forex dealer at a bank said.

The RBI, at 10.00 a.m. IST, is not expected take any rate action, though the decision is now seen as less of a formality in the wake of a jump in food prices.

A rate hike would boost the rupee and you can expect an about 1015 paisa reaction if the RBI delivers a surprise rate hike, the FX trader said.

Later in the day, U.S. inflation data is expected to show that core prices rose by 0.2 monthonmonth in July and by 4.8 onyear, according to a poll conducted by Reuters. The headline yearonyear inflation rate is pegged at 3.3, up from 3 in June.

We are likely to see something we haven39;t seen for some time, namely, annual inflation rising. The good news is that this is mainly due to base effects, ING Bank said in a note.

Reporting by Nimesh Vora; Editing by Sonia Cheema

Source Reuters