Rupee ends little changed as focus turns to Budget, US Fed decision

The Indian rupee hovered in a tight range in Monday's session and closed largely unchanged as traders awaited the outcome of the U.S. Federal Reserve meeting and India's federal budget for fresh cues.

The rupee closed at 83.1325 against the U.S. dollar, barely changed from its close at 83.1150 in the previous session.

The dollar index was last quoted steady near 103.5, while Asian currencies were largely range-bound.
 

Brent crude oil futures rose to a peak of $84.80 during Asian hours, the highest since November, after a drone attack on U.S. forces in Jordan added to worries over supply disruptions in the Middle East.
 

Price action on the rupee was largely driven by "routine dollar demand," on Monday, a foreign exchange trader at a private bank said.
 

There is "limited momentum on either side (for the dollar-rupee) pair," leading to the range-bound behaviour seen during recent sessions, the trader added.
 

The rupee has hovered between 83.0575 and 83.18 for nearly two weeks.
 

"Post-budget, we might see some volatility," Gaurang Somaiya, a foreign exchange research analyst at Motilal Oswal Financial Services said, referring to the presentation of the country's federal budget on Feb. 1.
 

India is likely to reduce its fiscal deficit by at least 50 basis points and may keep its gross market borrowing for financial year 2024/25 close to the current fiscal year's level, according to a Reuters report.
 

In the meantime, all eyes will be on the outcome of the U.S.
 

Federal Reserve's meeting on Jan. 31. While the Fed is widely expected to keep benchmark rates unchanged, Chair Jerome Powell's statement may offer cues on the timing of future rate cuts.
 

Investors are currently pricing in a nearly 52% chance of a Fed rate cut in March, according to CME's FedWatch tool.