According to the latest data, the Indian rupee strengthened to the level of 49.90/91 against the dollar backed by strong foreign inflows into the domestic stock markets following strong economic data from Europe and the United States.

The investors increased their risk appetite after they saw strong economic data from Europe and the United States. On the other hand, high demand for the US dollar in the domestic limited the rise of the rupee.

The rupee was at 49.87/88 against the US dollar this morning compared to Tuesday's close of 49.93/94. A foreign exchange dealer said the rupee gains are limited despite high inflows because of the strong performance by dollars against global currencies.

The latest inflation data released by the government showed that the country's wholesale-price index, which is the measure for inflation, rose 6.95 percent in the month of February. Investors are waiting for the RBI's decision on interest rates and the union budget that will be presented for fiscal year starting in April.

Dealers expect the Indian rupee to move in the range of 49.80 to 50.00 before the union budget.