Rupee trades range-bound ahead of Fed meeting

Mumbai, March 21 The rupee closed little changed on Tuesday as investors were cautious ahead of the decision of the pivotal US Federal Reserve meeting, amid major economies grappling with a crisis in the banking sector.

The rupee ended at 82.65 to the dollar, compared to its previous close of 82.63. It moved in a narrow range of 15 paisa all day.

Two traders said initial dollar bids from large state-run companies and lackluster trading volumes ahead of the Fed meeting kept the rupee contained in a range.

With the risk event looming, traders said they had built long USD/INR positions “slightly” as foreign exchange markets in India were closed on Wednesday.

Asian currencies were flat to slightly higher, tracking the dismal Dollar Index.

Focus turns to the Fed’s decision, due on Wednesday, as investors returned to anticipation of a 25 basis point rate hike amid relative calm after a crisis emanating from Credit Suisse and mid-sized US lenders roiled financial markets in the past week.

The fed funds repricing has been quite volatile of late and, at one point on Monday, indicated higher chances of a pause in the hike, spurred by global central banks’ pledge to support liquidity in the wake of the banking crisis.

A foreign bank trader said that a clear trend is only possible from the Fed’s comment and the dot plot.