In anticipation of the US Fed meeting, the Indian rupee is anticipated to trade range-bound and flat on Wednesday. The USDINR pair is anticipated to trade in a band of 82.45-82.83 throughout the day. In the previous session, the rupee gained value relative to the US dollar as the latter dropped from its high points. The local currency rose 10 paise from its previous close to close at the interbank foreign exchange market, where it started at 82.74 and ended at 82.71 against the dollar.
Which cited its survey of FX strategists, the rupee is anticipated to only partially make up for its recent losses versus the dollar over the course of the next year as the interest rate differential is forecast to widen further in addition to a worsening current account deficit.
“The Indian Rupee may open flat on Wednesday ahead of the U.S. Federal Reserve’s much-anticipated decision on monetary policy later in the day. This Wednesday, in advance of the Fed meeting, Asian and EM peers started off mixed. The key will be clues from Fed Chair Jerome Powell on the future course, with the Fed later in the day largely anticipated to announce its fourth consecutive 75 bps rate hike.
Fed futures currently indicate a nearly equal likelihood that the next move by the US central bank will be either a 50 bps or 75 bps raise. The rise in crude oil prices, however, may have capped the tendency for the local currency to appreciate. This Wednesday morning, the Rupee could begin trading at 82.65 to 82.67 to the dollar.