Rupee expected to stay under pressure with likely Fed rate hike adding to strain from high oil prices

The Indian rupee is expected to remain under pressure on Wednesday, as a Federal Reserve rate hike adds to the strain from rising oil prices. Traders anticipate the rupee opening weaker, potentially falling below the 96 mark, after it settled at 95.9550 against the dollar on Tuesday. The local currency has declined for seven consecutive days, losing around 1.5% despite the central bank's frequent interventions.

The slide has been consistent, with the rupee nearing the 96-a-dollar mark for the first time in two weeks. A break below 96 could accelerate the decline further, according to a currency trader. US interest rate futures indicate a greater than 90% chance of a Fed rate hike on Wednesday, up from 60% a week ago. Brent crude prices nearing $110 a barrel heighten concerns over inflation and push US yields to multi-year highs.

Investors will focus on the Fed's updated dot plot and economic projections to gauge policymakers' stance on future hikes. Chair Kevin Warsh's remarks on oil and inflation during his press conference will be closely watched.