The Indian rupee climbed to its highest level in two weeks on Wednesday, boosted by portfolio inflows, while improved odds of rate cuts by the Federal Reserve later this year further supported the currency.

The rupee was at 83.3550 against the U.S. dollar as of 10:05 a.m. IST, higher than its previous close at 83.41. The currency touched a peak of 83.3450 in early trading, its strongest since June 5.

The rupee was boosted by inflows into local debt and equity markets in the previous session and the gains likely extended as the flows continued on Wednesday, a foreign exchange trader at a state-run bank said.

Benchmark Indian equity indices, the BSE Sensex and Nifty 50, rose to record highs and were last quoted up by about 0.1% each.

A broadly weaker dollar and dip in U.S. bond yields after weaker-than-expected retail sales data boosted the odds of Fed rate cuts later this year likely aided the rupee further.

The "rupee is expected to trade within a defined range, with 83.10–82.90 as the (dollar) buying zone", said Amit Pabari, managing director at FX advisory firm CR Forex.

Investors are currently pricing in a 67% chance of a rate cut in September, up from about 61% a day earlier, according to the CME's FedWatch tool.

Despite data signalling a cooling in U.S. economic activity, multiple Fed officials reiterated their cautious stance on the future path of policy rates in remarks on Tuesday.

"We should not overreact to a month or two of promising news, just as it was not appropriate to take too much (of a) signal from the disappointing data at the beginning of this year," Boston Federal Reserve President Susan Collins said. (Reporting by Jaspreet Kalra; Editing by Sohini Goswami)