The Indian rupee rose modestly on Wednesday on the back of mild dollar inflows and positive cues from gains in other regional currencies, although traders remained wary of aggressively long bets amid simmering cross-border tensions.
The rupee 
Pakistan’s information minister said the country has credible intelligence that India intends to launch a military strike within the next 24 to 36 hours as tensions escalate following a deadly attack on tourists in Indian Kashmir.
India’s Cabinet Committee on Security (CCS) — consisting of Prime Minister Narendra Modi and his interior, defence, home and finance ministers — is scheduled to meet later in the day, a government source told Reuters.
Worries about the simmering tensions had sparked sharp moves in the rupee on Tuesday and this is likely to persist in the near-term, traders said.
On the day, the currency attempted to move towards 85 on modest inflows but its inability to do so indicates the market is not keen to build long positions, a trader at a state-run bank said.
Meanwhile, Asian currencies were mostly stronger, with the offshore Chinese yuan 
Optimism related to the easing of some trade tensions helped regional currencies and equities. U.S. President Donald Trump signed orders on Tuesday to soften the blow of his auto tariffs with a mix of credits and relief from other levies on materials.
The latest move “has added to signs that Trump could look to pare back some of his import tariffs,” MUFG Bank said in a note.
The benchmark Indian equity indexes were slightly in the green on Wednesday, while the benchmark 10-year bond yield nudged slightly higher.
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