Rupee ends steady at 71.12/USD; focus on Fed policy, Union Budget

The rupee Wednesday ended almost flat at 71.12 against the US dollar as forex traders preferred to sit on the fence while awaiting cues from key upcoming events like US Fed policy and India's Union Budget.

At the Interbank Foreign Exchange, the rupee opened on a weak note at 71.34 then fell further to 71.36 against the US dollar. The local unit, however, recouped most of its initial losses and settled for the day at Rs 71.12, lower by just 1 paisa over its previous close.

During the day, the Indian currency had depreciated by 25 paise to 71.36 against the US dollar but gathered strength towards the fag-end of the session amid increased selling of the greenback by exporters ahead of the outcome of the Federal Open Market Committee (FOMC) meeting and Sino-US trade talks outcome.

On Tuesday, the rupee had settled 1 paisa lower at 71.11 against the US dollar.

"The Indian rupee traded marginally lower today. It remains the second worst performing emerging market currency in last one month," Sanctum Wealth Management Chief Investment Officer Sunil Sharma said.

According to V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities, "Emerging market currencies traded right to US dollar as Fed likely to hold the rates as unchanged and outcome from US China trade talks likely to remain positive."