Rupee strengthens on solid equities' gains, but caution persists ahead of the FedThe rupee firmed on Wednesday, tracking buoyant domestic shares, but caution prevailed ahead of the US Federal Reserve's policy decision due later in the day.The rupee was last trading at 76.26 per dollar, more substantial than its previous close of 76.61, according to Reuters.

While the PTI said, the rupee gained 35 paise to close at 76.27 (provisionally) against the US dollar.

It closed at 76.62 against the greenback on Tuesday."The tone of the policy statement and Fed Chair (Jerome) Powell's speech will be closely followed," Abhishek Goenka, chief executive officer at consultancy firm IFA Global, told Reuters."How the Fed assesses risks to growth will be important, given the uncertainty around the Ukraine-Russia situation.

If the Fed highlights risks to growth, we may see the market reduce hikes expectations.

US yields would drop, and the dollar would weaken," he added.The Fed is expected to raise rates on Wednesday, with investors looking for cues on the trajectory of the policy path as expectations remain for an aggressive central bank action to control inflation which rose last month at the fastest pace in 40 years.Still, the rupee gained on solid domestic bourses, and the recent weakness in oil from multi-decade highs helped sentiment for emerging market assets somewhat on Wednesday."The rupee has witnessed a sharp reversal from...77.15 levels over the last week.

A slump in Brent crude oil prices from its 14-year highs and possibility of a positive outcome from the ongoing talks between Russia and Ukraine triggered the recent strength in the rupee," noted the currency desk of Emkay Global Financial Services."Along with the geopolitical news flow, the markets are waiting for the outcome of the US Federal Reserve meeting scheduled tonight.

The markets will also closely watch the Fed for details on how it plans to end its bond-buying program.

We expect the rupee to see further strength towards 76/75.80 levels until prices fail to break above 77 again," the note added.Most emerging Asian stock markets advanced, buoyed by a fall in China's COVID-19 cases and hopes of progress in Russian-Ukraine peace talks.While worries remain that India's current account deficits will widen as it depends on oil imports for more than 80 per cent of its needs and pushes inflation higher.India's inflation rose a touch further in February to above the Reserve Bank of India's upper end of the tolerance level of 6 per cent for the second month in a row.Still, the latest market trigger is ceasefire talks between Russia and Ukraine, with oil just above $100 per barrel, well off its multi-decade highs of near $140 a barrel.