MUMBAI, Dec 13 (Reuters) - The Indian rupee was little changed on Wednesday, ducking weakness in its Asian peers, as the Reserve Bank of India (RBI) likely intervened to cap losses in the domestic unit.
The rupee was at 83.3850 as of 10:20 a.m. IST, barely changed from its close at 83.3875 in the previous session.
The RBI sold U.S. dollars near the start of the trading session to prevent the rupee from depreciating, three traders said.
The dollar index ticked up to 103.88, while most Asian currencies were lower by 0.1% to 0.5%.
"Yesterday's high and low (in the rupee) was under 5 paisa ... expect a similar trading range today," a foreign exchange trader at a private bank said.
U.S Treasury yields retreated slightly on Tuesday after the country's consumer inflation came in largely along expected lines.
The core consumer price index (CPI) increased, as expected, by 0.3% month-on-month in November, up from 0.2% in October.
The headline CPI, however, edged up 0.1% month-on-month in November, against expectations that it would remain unchanged, like in October.
In light of the inflation data, "we doubt the Federal Reserve will seek to offer the market any meaningfully dovish signals," ING Bank stated in a note.
The Fed will deliver its policy decision during U.S. trading hours later in the day, and is widely expected to hold rates steady.
Investors will be keeping a keen eye on the Fed's forward-looking projections to gauge how well-placed market expectations are for the future trajectory of policy rates.
Investors currently expect that rate cuts may begin as soon as March or May next year, according to CME's FedWatch tool.
Meanwhile, the rupee "still remains vulnerable to hitting new lows but the extent of fall is limited by central bank intervention," said Anrob Biswas, head of FX research at SMC Global Securities. (Reporting by Jaspreet Kalra; Editing by Sonia Cheema)
