Indian rupee, the domestic currency appreciated by 8 paise to 72.86 per US dollar on Wednesday's opening trade, ahead of the outcome of the US central bank's meeting.
The domestic unit opened at 72.91 at the interbank forex market, and inched 8 paise higher to 72.86 per dollar.
On Monday, the rupee had settled flat at 72.94 against the American currency. Forex and equity markets were closed yesterday on account of Republic Day.
The local unit was trading in a narrow range against the US dollar on Wednesday, in line with other Asian currencies, ahead of the Fed meeting conclusion. Markets are also keenly watching progress on the US stimulus front.
Meanwhile, the dollar index, rose 0.08 per cent to 90.23 against a basket of six currencies.
"Asian currencies were mixed against the greenback ahead of the Fed meeting tonight," Reliance Securities said in a research note.
On the domestic equity market front, market indices reversed trend after the opening bell and fell for the fourth session on Wednesday, amid mixed global equities. Sensex was trading 450 points lower at 47,911 and Nifty fell by 125 points to 14,111.
Foreign portfolio investors (FPIs) sold shares worth Rs 765.30 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 387.76 crore in the Indian equity market on 25 January, provisional data showed.
Brent crude futures, the global oil benchmark, rose 0.43 per cent to USD 56.15 per barrel. Oil price continued to ease and COVID-19 cases continued to rise globally, but a major fall was avoided on the back of reports of the blast in Saudi Arabia.
Kshitij Purohit, Product Manager, Currency & Commodities at CapitalVia Global Research said," The rupee opened on flat at 72.88 against the US dollar in opening trade tracking queues from Asian equity market on slew earning reports amid worries over virus variants and hurdle on stimulus."
He added," Technically, USDINR pair closed firm against the US Dollar taking ques from strong economic data however due to rise in dollar index downside is capped. USDINR spot is trading below physiological level of 73.00 preceding 21-day SMA is currently around 73.11, which challenges any recovery moves and below this it may be bearish momentum will continue for the day, however we can expect buying from local banks from the level of 72.80 levels. USDINR Jan future will trade in the range of 72.80 -73.10 levels."