The rupee pared its initial losses and settled for the day on a positive note, higher by 1 paisa to close at 86.56 (provisional) against the US dollar on Wednesday, supported by positive domestic markets, while a strong US dollar and a recovery in crude oil prices capped sharp gains.
Forex traders said the US dollar gained on expectations of a no rate cut by the Fed in its Federal Open Market Committee (FOMC) decision. Besides, global risk sentiments were dampened amid tariff threats by the US President Donald Trump, they said.
At the interbank foreign exchange, the rupee opened on a weak note at 86.58, and during the day touched a high of 86.49 and a low of 86.61 against the American currency.