Rupee trades in a narrow band against dollar on muted domestic equities

Rupee trading in narrow range vs US$; FED minutes noted limited progress in core inflation; Dollar index unchanged; Sensex & Nifty up; FIIs net sellers. Rupee expected to remain in current range with US$ bids dominating inflows.

The rupee was trading in a narrow range against the U.S. dollar in early trade on Wednesday, amid a muted trend in domestic equities.

Forex traders said the rupee was trading in a narrow range as sustained foreign fund outflows weighed on investor sentiments.

At the interbank foreign exchange, the domestic unit opened at 83.31 against the dollar and then touched a high of 83.30, and a low of 83.32 against the greenback.

On Tuesday, the rupee recovered from its all-time low to settle 10 paise higher at 83.28 against the U.S. dollar.

The dollar index fell after the release of FED minutes overnight, while the U.S. 10-year bond was constant at 4.41 per cent.

"Participants in the Fed meeting minutes noted there was limited progress in bringing down core inflation. All agreed to move carefully on rates and said more tightening may be needed," said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

The rupee is expected to remain in the current range with the U.S. dollar bids dominating the inflows, Mr. Bhansali added.