The rupee consolidated in a narrow range and settled for the day 3 paise higher at 82.09 (provisional) against the US dollar on Wednesday, as participants remained on the sidelines ahead of the release of the retail inflation data.

At the interbank foreign exchange market, the local unit opened at 82.08 against the US currency and finally closed at 82.09 (provisional) against the greenback, registering a gain of 3 paise over its previous close.

During the session, the rupee touched a high of 82.01 and a low of 82.11 against the dollar.

On Tuesday, the rupee closed at 82.12 against the US currency.

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The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.15 per cent to 102.04.

Global oil benchmark, Brent crude futures, advanced 0.32 per cent to $85.88 per barrel.

"The Indian rupee tread water along with the dollar index ahead of the crucial inflation data from the US and India. The rupee consolidates in the narrow range with thin volume and volatility even after stronger domestic equities and foreign fund inflows," said Dilip Parmar, Research Analyst, HDFC Securities.

The market is pricing in for lower inflation readings after last week's RBI surprise rate pause.

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In the near-term, spot USD-INR is expected to trade between 81.70 to 82.50.

On the domestic equity market front, the 30-share BSE Sensex advanced 235.05 points or 0.39 per cent to end at 60,392.77 and the broader NSE Nifty gained 90.10 points or 0.51 per cent to 17,812.40.

Foreign Institutional Investors (FIIs) were net buyers in the capital market on Tuesday as they purchased shares worth ₹342.84 crore, according to exchange data.

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