• Indian Rupee (INR) falls for a second day
  • Indian domestic equities rise
  • US Dollar (USD) falls versus major peers
  • Federal Reserve rate decision is due later

The US Dollar Indian Rupee (USD/INR) exchange rate is rising for a second straight session. The pair rose +0.07% in the previous session, settling on Tuesday at 81.85. At 10:30 UTC, USD/INR trades +0.23% at 82.03 and trades in a range of 81.85 to 82.03.

The Indian Rupee along with its Asian peers, is struggling against the USD, with speculators scaling back short positions ahead of the FOMC rate decision. The Reserve Bank of India is likely to have intervened yesterday when the Indian currency rose to 81.70, as it is suspected to have done previously. The RBI’s intervention has helped India’s forex reserves rise back above $600 billion.

Indian domestic equities are rising, with the Sensex +0.7% at 66,825 while the Nifty 50 trades 0.66% higher at 19,807 as investors digest the latest round of earnings.

The US Dollar is rising against the Rupee but falling versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.16% at the time of writing at 101.16, extending losses from yesterday.

That dollar is pushing lower as investors look ahead to the Federal Reserve interest rate decision later today. The US central bank is expected to raise interest rates by 0.25% to a range of 5.25% to 5.5%, which would be the highest level in two decades. This would mark the 11th interest rate hike in the past 12 policy meetings.

While today’s rate hike is considered a dead cert, uncertainty exists over whether US central bank will look to increase interest rates again later in the year or whether today’s rate hike will mark the end of it aggressive monetary policy tightening cycle.

The tone of Federal Reserve chair Powell’s press conference, as well as any guidance from the Fed, will be key to deciding the US dollar’s next move.