The Indian rupee gained 4 paise to settle at 74.80 (provisional) against the American dollar on Wednesday tracking weakness in the greenback.
At the interbank forex market, the rupee traded in a narrow range. It started the day at 74.83 and closed at 74.80, up 4 paise over its previous closing of 74.84 against the US dollar.
During the session, the domestic unit touched an intra-day high of 74.73 and a low of 74.89 against the American currency.
The USD-INR spot traded in a very narrow range of 74.75-75. US Fed's policy outcome, scheduled to be announced later in the day, will provide some clarity over the trend, said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
On Fed's policy decision, Gupta said "we don't expect a rate action. If the-policy turns out to be ultra easy then we can see some fall in dollar index and may get reflected in USD-INR spot."
Gupta further suggested that "the policy will be reiteration of past measures. So, 74.50 will keep acting as a crucial support while 75 will act as an immediate resistance. Unless 75 breaks, we will see the spot trading in between 74.50-75."
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.24 percent to 93.47.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 370.91 points lower at 38,122.04 and broader NSE Nifty fell 81.10 points to 11,219.45.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 245.95 crore on Tuesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 1.02 percent to $43.66 per barrel.