Rupee rises 4 paise to 95.03 against US dollar in early trade; markets eye Federal Reserve policy announcement

The Indian rupee marginally rose by 4 paise to reach 95.03 against the US dollar in early trade on Wednesday, as crude oil prices stayed high and the greenback strengthened. Forex traders highlighted the rupee's struggles due to persistent economic challenges, such as the favorable stance of the dollar and Brent crude prices nearing USD 115 per barrel.

At the interbank foreign exchange market, the rupee managed slight gains, reaching 95.03, marking a 4 paise increase from the previous close. On Tuesday, the rupee closed at 95.07 against the American currency. Analyst Anuj Choudhary from Mirae Asset Sharekhan forecasted a slight negative trend for the rupee, citing a stronger dollar and weaker Asian currencies.

Any intervention from the Reserve Bank of India could provide support to the rupee at lower levels. Investors are closely watching the Federal Open Market Committee's (FOMC) decision, with Fed Chair Kevin Warsh's press conference expected to offer further guidance. The USDINR spot price is anticipated to fluctuate within the range of 94.85 to 95.40.

The dollar index, which measures the strength of the dollar against six major currencies, was trading at 102.37, up 0.06 percent. Brent crude oil, the global benchmark, surged 1.37 percent to USD 115.44 per barrel in futures trading. Meanwhile, the domestic equity market witnessed a decline, with the Sensex falling 601.14 points to 72,997.55 and the Nifty dropping 146 points to 22,604.80.

On a net basis, Foreign Institutional Investors (FIIs) invested ₹4,240.39 crore in equities on Tuesday, according to exchange data.