MUMBAI: The Indian rupee is expected to open little changed to the dollar on Wednesday as traders look for the US Federal Reserve’s views on the path forward for rates. The rupee is tipped at around almost the same levels in early trading as the previous session’s close of 82.6950.

It is a “pretty big Fed meeting” considering that the base case in recent days has shifted more towards it signalling a slowdown in the pace of tightening, a trader at a Mumbai-based bank said.

“If the Fed’s thinking is it may be early to give that signal, expect a gap down on rupee tomorrow.”

With the Fed later in the day widely expected to deliver its fourth straight 75 basis points rate hike, the key will be hints the Fed Chair Jerome Powell will drop on the path forward.

Fed futures now point to an almost even chance of whether the US central bank’s next move will be a 50 bps or 75 bps hike.

Concerns over the US growth outlook and steps by some of the other developed central banks that have been dovish relative to expectations have fed into hopes that the Fed may signal a smaller rate hike in December.

However, data released overnight dented hopes of a Fed pivot to a slower pace of tightening. US job openings unexpectedly rose in September, suggesting demand for labor remained strong.

Indian rupee falls

“We expect the (Fed) chair to open the door to a slower pace of hikes beginning in December,” BofA Securities said in a note. “Yet we expect the Fed to remain data dependent and emphasize cumulative policy rate tightening over any step down in pace.”

Asian currencies were mixed ahead of the Fed decision, while shares were fairly rangebound.

Worryingly for the rupee, Brent crude January futures rose overnight and were up in Asia.