The rupee depreciated 4 paise to 82.29 against the US dollar in early trade on Wednesday amid a muted trend in domestic equities.
Forex traders said the rupee is trading in a narrow range as investors are awaiting cues from the US FED interest rate decision later in the day.
At the interbank foreign exchange, the domestic unit opened at 82.28, then fell to 82.29, registering a decline of 4 paise over its last close.
On Tuesday, the rupee settled at 82.25 against the dollar.
Factors supporting the appreciation bias in the rupee include robust fundamentals, sustained FII inflows, and the weakening of the dollar index, CR Forex Advisors MD Amit Pabari said.
Pabari further noted that the potential for gains may be limited by the depreciation of the Chinese currency, as China's economic slowdown prompts its central bank to consider a rate cut.
"All in all, the USDINR exchange rate is expected to remain within the range of 81.80-82.80. Importers are advised to hedge against any declines near 82-81.80 levels, while exporters should wait for any pullback towards 82.50-60 levels before taking action," Pabari said.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.05 per cent to 103.28.
Brent crude futures, the global oil benchmark, rose 0.08 per cent to USD 74.35 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 23.73 points or 0.04 per cent lower at 63,119.43. The broader NSE Nifty advanced 5.90 points or 0.03 per cent to 18,722.05.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday as they purchased shares worth Rs 1,677.60 crore, according to exchange data.
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