MUMBAI: The Indian rupee weakened slightly against the dollar on Tuesday, while bond yields were little changed, as investors awaited the outcome of the US Federal Reserve’s policy meeting late on Wednesday for near-term direction.

The Fed has signalled a 75 basis point (bps) rate hike at its July 26-27 meeting, although data last week showing that inflation hit 9.1% year-on-year in June has raised the possibility of a larger 100 bps hike later this year.

India’s partially convertible rupee was trading at 79.77/78 per dollar at 0512 GMT, compared to its close of 79.73 on Monday. The unit rose to a high of 79.6950 during trade on Monday, its strongest since July 13.

“Cash dollar demand seems to have moderated. Dollar/rupee is likely to trade a 79.55-79.85 range intraday, with down side bias,” analysts at IFA Global Research said in a daily note.

Traders will track domestic equities for clues on foreign fund flows, while gains in other Asian currencies is expected to help sentiment. Domestic shares and, however, lost 0.8% each.