MUMBAI, May 15 Reuters The Indian rupee was mildly stronger on Wednesday, aided by gains in most Asian currencies ahead of a key U.S. inflation report which is expected to influence investor expectations of when the Federal Reserve will begin to cut policy rates.

The rupee was at 83.49 against the U.S. dollar as of 1005 a.m. IST, marginally higher than its previous close at 83.51.

The dollar index was down 0.1 at 104.9, while most Asian currencies rose. The offshore Chinese yuan was up nearly 0.2, while the Philippine peso was up 0.4, leading gains.

Mild dollar sales from foreign banks also aided the rupee in early trading, a foreign exchange trader at a staterun bank said.

Dips on USDINR are mostly shallow and then too you see demand from importers. Don39;t expect it to move below 83.45, the trader added.

The rupee has also been under pressure as foreign investors have remained net sellers of Indian equities over most trading sessions in May, having sold about 3 billion of equities so far.

U.S. producer prices rose more than expected in April, data showed on Tuesday, but underlying components of producer prices that feed into the consumer price index CPI came in lower, raising expectations of a soft U.S. CPI print on Wednesday.

Economists polled by Reuters expect the closely watched core CPI to rise by 0.3 in the month, down from 0.4 in March. Investors are currently pricing in a nearly 65 chance of a Fed rate cut in September, according to the CME39;s FedWatch…