MUMBAI, April 10 Reuters The Indian rupee closed higher on Wednesday, aided by likely inflows and lower U.S. bond yields, while staterun banks39; dollar appetite constrained the local currency39;s gains after it touched the strongest level in nearly three weeks.

The rupee closed at 83.1850 against the U.S. dollar, up 0.16, compared with its previous close at 83.3150. The currency rose to an intraday high of 83.16, its strongest level since March 21.

The dollar index edged lower to 104.06. Asian currencies were mixed, with the Thai baht down 0.2 while the Indonesia rupiah gained 0.3.

Earlier in the session, bunchedup dollar inflows on account of the currency and debt markets being shut on Tuesday aided the rupee, a foreign exchange trader at a foreign bank said.

But dollar bids from staterun banks eroded some of the early gains, the trader added.

U.S. consumer inflation data due later in the day remained the key focus as it is expected to impact expectations of when the Federal Reserve would start easing policy rates.

Odds of a June rate cut by the Fed have declined to 54, down from about 73 a month earlier, according to CME39;s FedWatch tool.

The inflation data is expected to show core consumer price inflation CPI rose 0.3 monthonmonth in March, down from the 0.4 rise in the previous month, according to economists polled by Reuters.

A substantial upside surprise on U.S. inflation data could push the rupee to weaken towards 83.3035, said Gaurang Somaiya, a foreign…