Indian rupee strengthens against US dollar ahead of Fed meeting

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The Indian rupee surged 14 paise to 74.54 against the US dollar (20.31 versus the UAE dirham) on Wednesday morning as IPO-related inflows and a positive trend in domestic equities supported the Indian currency.

At the Indian interbank foreign exchange, the rupee opened strong at 74.64 against the dollar and gained further ground to 74.54 in early deals, a rise of 14 paise over its previous close. On Tuesday, the rupee had settled at 74.68 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.01 per cent to 94.07.

"The rupee is gaining ground despite a rise in dollar index above 94.00 due to inflows from big IPOs," said Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors.

Traders said investors will track the US Fed meeting outcome for further cues.

"If the Fed is hawkish, maybe, we could see further dollar strength, else the tapering has been fully factored in by the market," Bhansali said.

On the Indian equity market front, BSE Sensex was trading 238.71 points or 0.40 per cent higher at 60,267.77 while the broader NSE Nifty advanced 76.50 points or 0.43 per cent to 17,965.45.

(with inputs from PTI)

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