Mumbai, Sep 20 (PTI) The rupee consolidated in a narrow range and settled 7 paise higher at 79.74 against the US dollar on Tuesday, snapping its four-session falling streak as investors await the US Fed's policy statement for further cues.
At the interbank forex market, the local unit opened at 79.70 against the greenback. It witnessed an intra-day high of 79.58 and a low of 79.77 during the session.
It finally ended at 79.74, up 7 paise from its previous close of 79.81. The rupee declined by 64 paise in the past four sessions due to forex outflows and a stronger dollar.
The dollar index, which measures the greenback's strength against a basket of six currencies, rose 0.12 per cent to 109.87.
Brent crude futures, the global oil benchmark, advanced 0.14 per cent to USD 92.13 per barrel.
"Rupee continued to consolidate in a narrow range despite gains in domestic equities. Volatility remained low ahead of the important FOMC policy statement that will be released tomorrow," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Somaiya further said the expectation is that the US central bank could raise rates by another 75 basis points. The Fed governor could maintain a hawkish stance and that could keep the dollar supported.
"We expect the USD-INR (Spot) to trade sideways and quote in the range of 79.40 and 80.05," Somaiya said.
The rupee settled marginally stronger against the dollar after a range-bound trade, said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Meanwhile, Asian and emerging market peers remained weak, while oil remained flat as investors awaited the US Fed meeting on Wednesday.
In the overseas markets, the dollar index remained marginally stronger supported by elevated bond yields, while the Euro struggled near parity against the dollar.
Ahead of the Fed meeting, markets could also await cues from building permits and home sales data.
Indian bond yields ended higher for a 5th straight session on Tuesday, as investors brace for an aggressive interest rate hike by the US Federal Reserve.
According to Jateen Trivedi, VP Research Analyst at LKP Securities, the rupee traded in a narrow range as dollar index traded on a muted note with eyes on US FED's statement and interest rate policy decision.
"Dollar has shown strength recently before going to policy week with CPI data favorable for dollar rally. It will be a crucial policy as 0.75 bos is already factored in by all asset classes and there is a hunch of higher rate hike which can create a panic into currency volatility," it added.
On the domestic equity market front, the BSE Sensex ended 578.51 points or 0.98 per cent higher at 59,719.74, while the broader NSE Nifty gained 194.00 points or 1.1 per cent to 17,816.25.
Foreign Institutional Investors (FIIs) turned net buyers in the capital markets, as they purchased shares worth Rs 1,196.19 crore on Tuesday, according to exchange data. PTI DRR MR