Dollar closed at 68.9450 against its opening at 68.8000. Dollar in the offshore market extended gains during evening trades Thursday tracking a sharp spike in spot pair backed by oil importers' demand amid likely overseas fund outflows from local stocks. Dollar opened higher Thursday on buying foreign banks ahead of the release of US Federal Reserve's June monetary policy meeting minutes to confirm whether policymakers will raise interest rates twice this year amid oil bids, "Foreign banks were seen building positions ahead of the FOMC minutes also oil importers demand is seen in the market," said a dealer with private-sector bank. "The upcoming US FOMC minutes would throw some light on future growth prospects of US," said Cube Edugains in a research report.
Federal Open Market Committee's (FOMC) June minutes are expected to explain members' rationale for the decision to raise rates in June and signal further tightening in the policy path.
"We will pay particular attention to the discussion of risks to the outlook in light of Chairman Powell's expressed confidence in the outlook against the rising threat of protectionism," said Michael Gapen, Head of US Economics Research at Barclays.
Oil prices dropped after US President Donald Trump sent a tweet urging Organisation of Petroleum Exporting Countries (OPEC) to reduce prices for crude.
"The OPEC monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $'s. This must be a two way street. REDUCE PRICING NOW!" wrote Trump on Twitter.
BSE Sensex closed 70.85 points lower at 35,574.55, while the Nifty 50 ended 20.15 points down at 10,749.75.