The rupee inched 2 paise higher to 73.35 against the US dollar after opening flat on Tuesday, even as the domestic equity market was trading with gains.
The domestic currency was trading in a narrow range at the interbank forex market. After opening at 73.36 per dollar, rupee gained by 2 paise to touch 73.35 from its previous close of 73.37 per dollar.
The dollar index fell 0.03 per cent to 93.39 against a basket of six currencies.
On the domestic equity market front, Sensex traded 220 points higher at 40,634 and Nifty gained 55 points to 11,927.
Foreign portfolio investors (FPIs) bought shares worth Rs 1,656.78 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 1,621.73 crore in the Indian equity market on 19 October, provisional data showed.
Brent crude futures, the global oil benchmark, fell 0.84 per cent to USD 42.26 per barrel. Oil price remained steady on concerns over rising corona virus cases globally and Libyan plan to increase output but was supported by hopes for US stimulus.
On Rupee's outlook, -Angel Broking in its note said," In the week gone by, Indian rupee depreciated by 0.44 percent and currently stands at 73.44 against the US dollar. India's CPI inflation came in at 7.34% for September again breaching RBI's tolerance band for the sixth consecutive month. Retail inflation for August was 6.69 per cent. US FED Vice Chairman Richard Clarida expressed his views on economic data being surprisingly strong since May though it will take another year for the output to reach pre-pandemic levels in the US. Unemployment claims from the US also came in worse than expected at 898K. Meanwhile, the US Senate will vote on a $500 billion stimulus package on 21st October according to Senate Majority leader Mitch McConnell."
On the currency's technical outlook, it added," With voting likely to happen on the stimulus package, USDINR (CMP: 73.44) is likely to move in the range from 72.5 mark at the lower end of the spectrum and 74.5 mark at the higher end.
"Rising COVID-19 cases, impasse over the US stimulus spending and uncertainty surrounding the US elections are keeping investors away," Reliance Securities said in a research note.
Further, most of the Asian currencies have started marginally weak against the US dollar this morning and could weigh on sentiments, it added.