Rupee opens 17 paise up at 88.05 as dollar index eases ahead of Fed meeting

Indian rupee

The rupee opened 17 paise up on September 16 on easing dollar index, as the US Federal Reserve begins its two-day meeting in which it is largely expected to cut rates, the first such move in nine months.

The rupee opened at 88.05 against the US dollar after ending the previous session at 88.22.

The dollar index, which measures the greenback's against a basket of six major currencies, fell to 97.22 in the early trade from 98.302.

The dollar index eased further as the Federal Reserve begins two-day policy meeting with speculation that the policymakers will deliver larger than expected rate cuts.

"For now, USD/INR is expected to trade within a range of 87.50–88.50. A decisive break beyond this band could quickly trigger a 40–50 paisa move in the corresponding direction," said Amit Pabari, managing director at CR Forex Advisors.

The Fed is widely expected to cut interest rates as it grapples with a slowing labour market, sticky inflation and a push by President Donald Trump for lower borrowing costs.

The US President for months has been putting pressure on Fed chair Jerome Powell to cut rates and repeatedly encouraged him to resign. The median estimate from a Bloomberg survey of economists is for a 25 basis point rate reduction.

Trump argued for a “big cut” ahead of the pivotal meeting at which the central bank’s governors are expected to ease policy for the first time in nine months, Bloomberg News reported. “I think you have a big cut,” Trump told reporters on September 14 on his way back to Washington.