The dollar index was up 0.2% for the day to 96.737 shortly after the announcement
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In the previous session, the rupee had settled at 75.78 against the greenback
Data later in day on US factory gate inflation may cement expectations Fed will announce an accelerated tapering of stimulus, allowing it to wrap up bond-buying around March, proceed with rate hikes
The dollar index gained 0.37% on the day to 96.853. The euro fell 0.44% to $1.1199
The dollar hovered below a 16-month peak in early Asian trade
The dollar rose to a 16-month high on Tuesday after data showed US consumers looked past rising prices and drove retail sales higher than expected last month
The data due on Wednesday is expected to show U.S. consumer prices galloped and Chinese factory gate prices soared in October
The dip in the greenback pulled the dollar index to a one-month low in Asian hours
The dollar made a wobbly start to the week on Monday with the kiwi and sterling edging higher after a red-hot inflation readout in New Zealand and hawkish remarks from Britain's central bank chief
The dollar index, which measures the currency against six rivals, was about flat at 94.016, after dropping 0.53% on Wednesday, the most since Aug. 23.
The rupee's movement has been particularly strong in the past few sessions
Still, uncertainty remains whether the developer will be able to pay the coupon on its offshore dollar bonds, due on Thursday.
Rupee had risen rapidly last week of August, closing at 73 a dollar level on August 31, from 74.2 level on August 26 after Fed Chair Powell indicated he was in no hurry to raise rates
The number of Americans filing new claims for jobless benefits fell last week, while layoffs in August dropped to their lowest level in more than 24 years
The dollar index, which measures the greenback against a basket of six currencies, fell 0.091% to 92.903.
Rising Covid-19 infections caused by the highly contagious Delta variant have fuelled concerns about the recovery from the global health crisis
A drop in the U.S. dollar provided a boost on Monday, making crude less expensive for holders of other currencies
Strong corporate profits have eased concerns over the Covid pandemic, as vaccine roll-outs continue apace in developed markets