The Indian rupee edged higher against the US currency on Wednesday, tracking recovery in wider Asian markets, but gave up opening gains on importer-led dollar buying.

The rupee traded at 82.45 per dollar by 10:50 a.m. IST after opening at 82.31, compared with 82.49 in the previous session.

The currency gave up initial gains as state-run banks were seen buying dollars, likely on behalf of oil marketing companies and importers, two traders said, adding they were closely watching the 82.50 level. There was also fixing-related dollar demand in the market, a trader said.

"A breakout above 82.50 amid speculative buying can drive the USD/INR pair towards 83.00 levels," said Amit Pabari, managing director at CR Forex Advisors, adding that their overall bias remained for an upwards move.

The concerns over the demise of Silicon Valley Bank (SVB) eased, with the Wall Street rallying overnight to snap a three-day losing run. Asian shares and currencies also rose.

The risk appetite was helped by US inflation data, which was in line with expectations.

The US consumer price index (CPI) rose 0.4 per cent month-on-month in February after accelerating 0.5 per cent in January. In the 12 months through February, the CPI increased 6.0 per cent, compared with 6.4 per cent in January.

The data increased the odds of a small-sized interest rate hike by the US Federal Reserve next week. A few economists, including those at Goldman Sachs, had called for a pause in the wake of the SVB crisis.

Following the data, futures priced in a near-80 per cent chance of a 25 basis-point rate hike. Meanwhile, India's February trade data likely to be released later in the day would be closely watched.