At the interbank foreign exchange market, the local unit opened at 74.36 against the dollar and witnessed an intra-day high of 74.35 and a low of 74.54 during the session. The local unit finally ended the day at 74.47, down 5 paise over its last close. On Monday, the rupee had settled at 74.42 against the US dollar. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.12 per cent to 92.76.
"The Indian rupee stuck in a small range with thin volume ahead of month-end adjustment. Risk-averse sentiments, stronger dollar, lower US real interest rate, and weaker Chinese yuan weighed on the Indian rupee. Though, rupee remained resilient among Asian currency baskets in today’s trade following strong dollar inflows in primary markets," said Dilip Parmar, Research Analyst, HDFC Securities.
On the domestic equity market front, the BSE Sensex ended 273.51 points or 0.52 per cent lower at 52,578.76, while the broader NSE Nifty declined 78 points or 0.49 per cent to 15,746.45. Global oil benchmark Brent crude advanced 0.39 per cent to USD 74.79 per barrel in futures trade. Meanwhile, foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 2,376.79 crore, as per exchange data.
According to Sriram Iyer, Senior Research Analyst, Reliance Securities, the rupee ended marginally weak against the US dollar tracking weakness in the regional currencies and equities ahead of the Fed decision on Wednesday.
Meanwhile, most of the Asian currencies were weak tracking a slump in Chinese equities. Chinese A-shares and Hong Kong''s benchmark index extended heavy losses to hit multi-month closing lows on Tuesday, as investors worried over the impact of tighter government regulations.
"Rupee after opening on a flat note fell against the US dollar following weakness in domestic and global equities. The currency was weighed down also on the back of sharp weakness in the Chinese Yuan," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Somaiyaa further noted that "in the next couple of sessions market participants would be a little cautious ahead of the important FOMC policy statement that is expected to be dovish. We expect the USDINR (Spot) to trade sideways with a negative bias and quote in the range of 74.20 and 74.80."