Rupee opens marginally higher at 72.94 per dollar

Indian rupee opened marginally higher at 72.94 per dollar on Wednesday against Monday's close of 72.95, amid selling seen in the domestic equity market. On January 25, rupee ended flat at 72.95 per dollar against Friday's close of 72.97. On Tuesday, the currency market was shut on account of Republic day.

"The rupee has managed to hold its fort around the 72.90 to 73 levels, but given the selloff in equities and the likelihood of a rebound in the dollar index, we see the trend tilting slightly towards depreciation going forward. In terms of the global cues, the Federal Reserve's policy decision this week is not expected to be ultra-dovish. More so, markets will be watching the Fed's guidance on rates and any outlook on its bond buying plan," said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.

"Another key factor to watch out for the rupee is India's federal budget. If the government compromises on the fiscal guidance by a huge margin in an attempt to revive the economy, rupee may take a hit and further depreciation looks likely on the cards. We expect the Indian rupee to hover in the range of 72.50-73.50 in near term," she added.

Oil prices climbed on Wednesday after industry data showed U.S. crude stockpiles fell unexpectedly last week and China, the world's second-biggest oil user, reported its lowest daily rise in COVID-19 cases, bolstering hopes of a pick-up in demand.