Rupee Edges Up 4 Paise to 95.03 Against US Dollar as Markets Await Fed Decision

The Indian rupee registered a marginal gain of 4 paise to trade at 95.03 against the US dollar in early trade on Wednesday. The currency remains under pressure due to elevated crude oil prices near USD 115 per barrel and a stronger dollar index, while domestic equity markets also recorded significant declines.

The Indian rupee traded within a narrow range on Wednesday, edging up by 4 paise to 95.03 against the US dollar in early trade. This follows a previous close of 95.07 against the American currency on Tuesday.

Forex traders noted that the domestic currency continues to face pressure due to persistent macroeconomic headwinds, including global dollar strength and elevated Brent crude oil prices hovering near USD 115 per barrel. At the interbank foreign exchange market, the rupee recorded marginal gains to touch 95.03.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, stated that the rupee is expected to trade with a slight negative bias due to a positive dollar and weak Asian currencies. Elevated crude oil prices are also anticipated to keep the currency under pressure, though potential intervention by the Reserve Bank of India (RBI) could provide support at lower levels.

Investors are closely monitoring the upcoming Federal Reserve policy announcement. While the Fed is widely expected to keep interest rates unchanged, markets are awaiting guidance from Federal Reserve Chair Kevin Warsh's press conference. Analysts expect the USDINR spot price to trade in a range of 94.85 to 95.40.

Meanwhile, the dollar index, which measures the greenback's strength against a basket of six major currencies, was trading higher by 0.06 per cent at 102.37. Brent crude futures rose 1.37 per cent to trade at USD 115.44 per barrel.

On the domestic equity front, the broader markets witnessed a downturn in early trade. The BSE Sensex tumbled 601.14 points to 72,997.55, while the Nifty fell 146 points to 22,604.80. Despite the equity market decline, exchange data showed that Foreign Institutional Investors (FIIs) were net buyers, purchasing equities worth ₹4,240.39 crore on Tuesday.

"Currency fluctuations and high crude oil prices directly impact input costs and operating margins for businesses across sectors, particularly for startups dependent on imports or international supply chains. When macroeconomic volatility increases, founders must exercise caution with cash flow management and foreign exchange exposure. Monitoring central bank policies and global inflation trends is critical for maintaining financial stability in a shifting economic landscape." — Dr. Shishir Gupta, Founder & CEO, StartupLanes