USD/INR Closed at 72.9950 against its open at 72.94. Dollar ended lower amid thin traded volume Tuesday on selling by exporters amid a weak greenback."Today trading volumes were low. Few exporters selling were seen, and dollar was also weak due to US election concerns.
The greenback remained subdued on cautious mood ahead of midterm elections, the results of which will determine which party controls the House and Senate.
Also, investors look forward to Thursday's monetary policy announcement from the Federal Reserve.
The Fed is widely expected to leave interest rates unchanged, but traders will keep a close eye on the accompanying statement for clues about an expected rate hike in December.
Reflecting a slight cooling off after a record month in September, the Institute for Supply Management released a report on Monday showing a modest slowdown in the pace of growth in US service sector activity in the month of October.
The ISM said its non-manufacturing index dropped to 60.3 in October after rising to 61.6 in September. Economists had expected the index to drop to 59.3.
On the domestic front, no major economic data is expected to be released but market participants will be taking cues from how global crude oil prices from here on.
Yesterday, crude rebounded from its lows after a five day slump as the United States formally imposed punitive sanctions on Iran but granted eight countries temporary waivers allowing them to keep buying oil from the Islamic Republic.
Sensex closed up 0.12 percent at 34,991.91, while the Nifty rose 0.06 percent at 10,530.