The rupee pared early gains to settle on a flat note at 75.59 (provisional) against the US dollar on Wednesday ahead of the US Federal Reserve’s monetary policy decision, even as domestic equities were trading on a positive note.
Forex traders said rupee traded in a range bound manner in the absence of any major trigger and market participants are eagerly awaiting Fed’s stance and their outlook on the US economy for further cues.
The rupee opened at 75.49 against the US dollar, but pared the gains to settle at 75.59 against the US dollar, up 2 paise over its previous close.
It had settled at 75.61 against the greenback on Tuesday.
During the four-hour trading session, the domestic unit saw an intra-day high of 75.42 and a low of 75.60.
“The USD/INR spot has continued to remain range bound as there was no major catalyst to react to. Now the market’s focus is on tonight Federal Open Market Committee stance and its outlook on the US economy,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
Mr. Gupta further added that “we don’t expect a rate cut by Fed but it may provide a grim outlook and introduce more unconventional measures like yield curve control to keep the rates under control. In USD/INR spot 75 has been acting as a crucial support, a break of which is unlikely”.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.25 per cent to 96.08.
The 30-share BSE benchmark Sensex was trading 243.76 points higher at 34,200.45 and broader NSE Nifty rose 62.40 points to 10,109.05.
Foreign institutional investors were net buyers in the capital market as they bought shares worth ₹ 490.81 crore on Tuesday, according provisional exchange data.
Brent crude futures, the global oil benchmark, fell 1.65 per cent to USD 40.50 per barrel.