The rupee gave up most of its early gains by the end of trade on Wednesday as corporate and importer demand for the dollar offset support from lower crude oil prices ahead of the US Federal Reserve’s policy decision, dealers said.

Market participants speculated that the Reserve Bank of India (RBI) intervened through dollar purchases during the day, which weighed on the local currency. The central bank could have bought around $2 billion-$3 billion on Wednesday, dealers said.

The domestic currency settled at 94.53 per dollar, marginally stronger than its previous close of 94.56 per dollar. During the session, it had strengthened to a six-week high of 94.29 per dollar, aided by a decline in global crude prices.

Brent crude remained below $80 a barrel for a second straight session after easing geopolitical tensions following reports of an interim peace agreement between the US and Iran.

“The Indian rupee rallied to a six-week high, marking its fourth consecutive session of gains on the back of anticipated dollar inflows following RBI measures. The local currency outperformed its Asian peers as crude oil prices continued to soften, driven by expectations of easing energy supply pressures from a potential US-Iran deal. Investor focus now shifts entirely to today’s FOMC meeting, which is expected to dictate the dollar’s short-term trajectory,” said Dilip Parmar, research analyst, HDFC Securities.

The rupee has appreciated 0.3 per cent against the dollar in the current financial year. However, in the current calendar year, it has depreciated 4.92 per cent against the greenback.

Market participants remained cautious ahead of the Federal Reserve’s policy announcement later in the day. While the US central bank is widely expected to leave interest rates unchanged, investors will closely watch its commentary for clues on the future rate trajectory under Chair Kevin Warsh.

Analysts said a hawkish signal from the Fed could support the dollar and weigh on emerging-market currencies, including the rupee, while a more neutral stance may help sustain the domestic currency’s recent recovery.

“The US Fed decision was in focus. Broadly, there is an appreciation bias,” said a dealer at a state-owned bank. “The rupee can trade between 94 per dollar and 95.10 per dollar,” he added.

The rupee has strengthened over the past few sessions on the back of softer oil prices and expectations that recent RBI measures to attract foreign-currency inflows will support external balances.