The dollar was trading flat as it recovered some ground after falling on Wednesday's lower-than-expected U.S. core inflation data. Investors remain prudent about aggressively selling the dollar even though markets have brought forward expectations for the next Federal Reserve interest-rate cut,

The Indian rupee is likely to open marginally higher on Wednesday as the dollar retreats in the lead up to U.S. inflation data that will give cues on the direction of U.S. interest rates.

European stock markets experienced a strong rally following cooling inflation data from the UK and the US on Wednesday. However, the weakness in the euro and the pound sterling may persist due to the ongoing economic and political uncertainties.