Forex traders said the major factors affecting the rupee are geopolitical developments.
Moreover, the Reserve Bank of India has also intervened on both the buying and selling sides to keep the rupee within a range of 87.50 to 88.50, they said.
At the interbank forex market, the rupee opened at 88.21 and touched an early low of 88.34 and a high of 88.18 against the dollar, registering a gain of 11 paise over the previous close.
On Tuesday, the rupee fell by 10 paise to close at 88.29 against the US dollar.
“Today, the rupee is expected to open near flat amid mixed macroeconomic factors and major central bank meetings starting with BoC, FED, BoJ and culminating with ECB on Thursday,” said Anil Kumar Bhansali, head of the finance ministry and executive director of Finrex Treasury Advisors LLP. Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.14 percent to 98.81. Brent crude, the global oil benchmark, fell 0.08 percent to USD 64.35 per barrel in futures trading.
“All eyes are now on the Federal Reserve’s FOMC meeting, where a 25 basis point rate cut is all but certain. However, what will really determine the direction of the market is the Fed’s tone – whether it signals more rate cuts or hints at a pause,” said CR Forex Advisors MD – Amit Pabari.
For the rupee, resistance is around 88.40 and support is around 87.60-87.70. A decisive move below that zone could open the door for a further decline towards 87.20, Pabari added.
In the domestic equity market, Sensex rose 287.94 points to 84,916.10 in early trade, while the Nifty rose 86.65 points to 26,022.85.
According to stock market data, foreign institutional investors bought shares worth Rs 10,339.80 crore on Tuesday.
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