Reuters Synopsis The Indian rupee finished the day marginally higher, propelled by ongoing tensions in the Middle East.

Continuous interventions from the central bank have provided support against the U.S. dollar.

Traders remain watchful as critical inflation data from India and the U.S. approaches.

Throughout August, the central bank has actively engaged in the foreign exchange market.

Attention is now on forthcoming inflation reports that could influence future monetary policy decisions.

By Reuters Last Updated: Aug 12, 2026, 03:56:00 PM IST Follow us The Indian rupee ended modestly higher, wedged between anxiety over the Middle East conflict and the impact of persistent central bank intervention that has helped steady the currency.ADVERTISEMENT The rupee ended at 95.33 per U.S. dollar, up 0.1% from its close at 95.4350 in the previous session.While dollar sales from state-run banks - most likely on behalf of the Reserve Bank of India - kept a lid on losses, caution heading into key U.S. and India inflation prints and worries over higher oil prices contained the room for gains, traders said.

India's central bank has intervened frequently in the FX market over August, helping anchor the rupee after it threatened a breach of record lows last month.

"It's a complicated market to trade and it's unlikely that such price action keeps up," a trader at a foreign bank said, noting that he sees higher chances of the rupee falling to 95.80 than strengthening to 95.

The currency's record low of 96.96 was hit in May.Later in the day, the focus will be on inflation data releases.ADVERTISEMENT India is expected to post data showing retail inflation rose to 4.5% in July, as per a Reuters poll.

The generalization of inflation remains key to watch for," BofA analysts said in a note.ADVERTISEMENT ADVERTISEMENT In the U.S., data is expected to show that consumer prices edged up 0.1% in July after falling 0.4% in June, according to a Reuters poll.

The data will influence expectations of potential rate hikes by the U.S.

Federal Reserve.

Money markets are pricing in a 50% chance of a September hike by the Fed and about 50 bps of hikes by the RBI over the next 12 months.