The Indian rupee depreciated 11 paise to 73.72 against the US dollar in opening trade on Wednesday, tracking a strong greenback in the overseas market.
Forex traders said a positive trend in domestic equities and sustained foreign fund inflows supported the rupee, but firm crude oil prices and broad strength in the US dollar index dragged the local unit down.
At the interbank foreign exchange, the rupee opened at 73.70 against the dollar, then fell further to 73.72, registering a decline of 11 paise from the last close.
In the previous session on Tuesday, the rupee had settled at 73.61 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.08 per cent to 93.27.
Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 1,041.92 crore, as per exchange data.
According to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors fund flows into the market are "good enough but getting absorbed by the RBI".
"All are watching out for today's US Fed meeting with great interest. Exporters will sell near to 73.80 and importers will buy near to 73.50," Bhansali noted.
The US Fed meeting outcome will be announced later in the day. Forex traders are awaiting cues on taper timeline and US Fed's new projections on interest rates.
On the domestic equity market front, the 30-share index was trading 164.86 points or 0.28 per cent higher at 59,170.13. Similarly, the broader NSE Nifty was trading 44.45 points or 0.25 per cent up at 17,606.45.
Global oil benchmark Brent crude futures advanced 1.02 per cent to $75.12 per barrel.