The Indian rupee strengthened against the U.S. dollar in the European session on Tuesday.

In economic news, data from the Ministry of Commerce and Industry showed that India's wholesale price inflation softened more-than-expected in August to the lowest level in four months. The wholesale price index, or WPI, rose 1.31 percent year-over-year in August, slower than the 2.04 percent increase in July. Economists had expected inflation to ease to 1.80 percent.

On a monthly basis, wholesale prices dropped 0.45 percent from July, when they increased by 0.78 percent.

Against the U.S. dollar, the rupee rose to a 1-1/2-month high of 83.7090 from an early low of 83.8890. At yesterday's close, the rupee was trading at 83.8200 against the greenback.

If the rupee extends its uptrend, it is likely to find resistance around the 82.00 region.

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