USDINR closed at 68.9425 against its opening at 68.9650. Dollar ended higher Tuesday on buying by nationalised banks likely on behalf of oil importers tracking a retreat in oil prices.Expectation of US Federal Reserve likely to continue raising interest rates despite criticism from President Donald Trump further supported the currency pair. Dollar pared gains after hitting intraday high of Rs 69.08/$1 during afternoon trades Tuesday on selling by nationalised banks likely on behalf of the Reserve Bank of India . "Banks including Bank of India and Canara Bank sold dollars on behalf of RBI. RBI intervened to curb the sharp appreciation in spot. This even caused HDFC Bank to start selling dollar,".
Yesterdays main news came from sudden jump in US 10 year yield to 2.95% after news spread that Bank of Japan (BOJ) planning to end its stimulus program and change its stand on monetary policy to beat low inflation.
US Treasury yields rose on reports that the Bank of Japan was debating moves to scale back its massive monetary stimulus, spurring bids for the Japanese currency yen.
The 10-year Treasury yields climbed to 2.96% on Monday from 2.88% previous close.
The BoJ is holding preliminary talks on making changes to its interest-rate targeting and stock-buying techniques. The yen moved higher, following such news.
Meanwhile, on Friday, a White House official told CNBC that Trump is concerned the US central bank will raise rates two more times this year.
Earlier, Trump had questioned the Fed's expected pace of hikes in posts on Twitter, saying it takes away from the United States' "big competitive edge" and could hurt the US economy.
On the US economic data front, existing home sales in US contracted 0.6% on monthly basis missing expectation of 0.5% expansion.
Crude oil prices retreated on Tuesday as attention shifted to the risk of oversupply, with market participants shrugging off escalating tensions between the United States and Iran.
Saudi Arabia and other large producers are also ramping up output to offset losses that are likely to come as a November deadline approaches for other countries to comply with US sanctions on crude sales from Iran. While, US crude inventories at the delivery hub at Cushing, Oklahoma gained in the four days to Friday.
Brent crude oil futures for Sep delivery traded 0.34% down at $72.81 a barrel on Tuesday.
Sensex provisionally ends 112 points higher with 19 components in the green.