The rupee on Thursday opened 28 paise down at 70.68 against the greenback after the US central bank hiked interest rates by 25 basis points.
The local currency on Wednesday pared early gains but managed to end 4 paise higher at 70.40 against the US dollar.
On the domestic front, rupee gained in the previous session after RBI decided to scale up the amount of liquidity infusion by Rs 10,000 crore to Rs 50,000 crore this month after a review of the evolving liquidity conditions.
The RBI has already injected Rs 20,000 crore through two OMO purchase auctions.
“Today, USDINR pair is expected to quote in the range of 70.30 and 71.20,” Motilal Oswal Financial Services said in a report.
The Fed raised interest rates by a quarter percentage points on Wednesday and signalled that interest rate increases next year would be at a slower pace than previously forecast. The decision to increase the rates for the fourth time this year was widely anticipated.
From the UK, the focus will be on the Bank of England policy statement wherein the central bank is expected to hold rates but market participants will be keeping an eye on what the BoE governors stance is on the UK economy post Brexit.