Mumbai: The rupee on Wednesday ended almost flat against the dollar at 62.69 ahead of the US Federal Reserve's monetary policy statement that could shed light on the timing of interest rate hikes.
The rupee resumed slightly higher at 62.68 per dollar as against the last closing level of 62.70 per dollar at the interbank foreign exchange market. It hovered in a limited range of 62.6175 and 62.78 before concluding at 62.69, showing a marginal gain of 1 paisa, or 0.02 per cent.
While the US central bank is not expected to lift interest rates on Wednesday, forex traders are keeping a keen eye on what it has to say about its near-term plans.
There are expectations that the word 'patient' will disappear from the forward guidance part of the Fed's statement, while the US central bank will say it is not in a hurry to raise rates, said a forex dealer.
The dollar index, a gauge of six major global rivals, was down by 0.18 per cent on Wednesday.
Veracity Group CEO Pramit Brahmbhatt said, "Rupee traded slightly strong for the day...exporters & banks were seen selling dollars."
Also, the local equities traded low and ended on a weak note for the day which dented the rupee movement, he added. The trading range for the spot dollar/rupee pair is expected to be within 62.30 to 63.20, Mr Brahmbhatt said.
In New York market, the dollar traded flat against most rivals on Tuesday, and inched lower against the euro for the second session, ahead of the expected release of the Federal Open Market Committee's monetary policy statement.
Meanwhile, the Sensex failed to maintain initial gains and ended lower by 114.26 points, or 0.40 per cent, to close at 28,622.12.
"The Rupee remained in a very small trading range ahead of the Fed policy meet tonight. However, custodian inflows through foreign banks continue to offset importers' dollar purchases," Admisi Forex director Suresh Nair said.
"We believe that the markets may have already factored in a dovish policy and any hint on rate hikes this year or change in tone from the Fed chief could push the pair to 63 and above."
Meanwhile, the forward premia eased on sustained receiving by exporters.
The benchmark six-month premium payable in August moved down to 216-217.5 paise from yesterday's closing level of 217.5-218.5 paise while forward contracts maturing in February 2016 ended almost stable at 434-435.5 paise.
The Reserve Bank of India fixed the reference rate for dollar at 62.6720, and for euro at 66.3383.
The rupee continued to remain firm against the pound to 91.95 as against 92.51 on Tuesday, and ended lower against the euro to 66.55 as against 66.47 on Tuesday.
The domestic currency also dropped against the yen to 51.75 per 100 Japanese yen from 51.71 previously.
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