The rupee traded in a narrow range at 73.64 per dollar on Wednesday, ahead of the US Federal Reserve's policy decision, despite positive domestic equities and foreign fund inflows.
The local unit opened at 73.70 at the interbank forex market, falling 7 paise over its last close, but soon pared the losses and was trading at 73.64, unchanged from its previous closing.
As per Geojit Financial Services, For USDINR, 73.83 and 74.05 may act as crucial levels in the upside while 73.48 and 73.25 will act as support levels.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.01 per cent to 93.06. The dollar traded steady today as investors awaited the outcome of the FOMC meeting, hoping that Fed policymakers would maintain a dovish policy.
"The focus will be on the Federal Open Market Committee (FOMC) tonight. Market participants would expect further clarifications from the US Fed on how average inflation-targeting framework would be implemented," said Abhishek Goenka Founder and CEO, IFA Global.
Goenka further said that "the threshold for the US dollar to weaken from current levels is high as a lot of dovishness has already been factored in. One possible trigger could be the Fed predicating keeping rates at close to zero on inflation expectations reaching a certain level".
On the equity market front, domestic benchmarks Sensex and Nifty traded on a bullish note on Wednesday, amid positive global equities. Extending gains for the second straight session, the 30-scrip BSE benchmark Sensex traded 138 points higher at 39,138 and NSE Nifty 50 was trading 45 points higher at 11,567.
Foreign portfolio investors (FPIs) bought shares worth Rs 1,170.89 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 895.63 crore in the Indian equity market on 15 September, provisional data showed.
Brent Crude futures, the global oil benchmark, rose 1.48 per cent to USD 41.13 per barrel. Oil price rose backed by supply disruption in the US due to hurricane. However, the overall sentiment still remained a concern as participants expect a slow recovery in demand.
Worldwide, there were 297.27 lakh confirmed cases and 9.39 lakh deaths from COVID-19 outbreak. Meanwhile, India's death toll from COVID-19 infections rose to 82,091 and total coronavirus cases climbed to 50.20 lakh as of Wednesday.