Markets are also keenly watching progress on the US stimulus front.
The rupee appreciated 8 paise to 72.86 against the US dollar in opening trade on Wednesday, ahead of the outcome of the US central bank’s meeting.
At the interbank forex market, the domestic currency opened at 72.91 against the US dollar and inched higher to 72.86 against the greenback — registering a rise of 8 paise over its previous close. On Monday, the rupee had settled at 72.94 against the American currency. Traders said the local unit was trading in a narrow range against the US dollar on Wednesday morning ahead of the Fed meeting conclusion. Markets are also keenly watching progress on the US stimulus front.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.08 per cent to 90.23. “Asian currencies were mixed against the greenback ahead of the Fed meeting tonight,” Reliance Securities said in a research note. The euro and the sterling have started marginally weaker against the US dollar this Wednesday morning in Asian trade. On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 294.83 points lower at 48,052.76, and the broader NSE Nifty fell 86.25 points to 14,152.65. Foreign institutional investors (FII) were net sellers in the capital market as they offloaded shares worth Rs 765.30 crore on a net basis on Monday, according to exchange data. Forex and equity markets were closed on Tuesday on account of Republic Day.
Brent crude futures, the global oil benchmark, rose 0.43 per cent to $56.15 per barrel.
The domestic currency is likely to strengthen 1.3 per cent and average 73.5 against the US dollar in the financial year 2022-23 compared with an average level of 74.4 in the financial year 2021-22.