USD/INR closed at 74.3950 against its open at 73.86. Dollar ended at fresh record high Tuesday on buying by foreign banks amid likely overseas funds outflow from local stocks.
Also, few banks with foreign offices bought dollars taking advantage of the arbitrage opportunity between spot and one-month non-deliverable forward market, adding further to the appreciation in the spot pair. There are FII outflows from local stocks, high crude oil prices, and depreciating Yuan leading to rise in the spot pair. Also some foreign banks bought dollars taking advantage of the arbitrage opportunity in the spot and NDF.
Also, reports about disruptions in oil production in the Gulf of Mexico due to hurricane Michael and news about explosion at a key oil refinery in Canada supported the rally.
According to media reports, the US administration is "in the midst of an internal process" of considering waivers for countries that are reducing imports of Iranian crude.
Meanwhile, it is widely expected that Saudi Arabia will steadily increase production to compensate for the loss of Iranian oil from early November.
However, traders will look ahead to crude inventories data from American Petroleum Institute and Energy Information Administration.
Brent traded 0.61% higher at $84.42/barrel while WTI traded 0.52% higher at $74.68/barrel.
People's Bank of China fixed its yuan at 6.9019 per dollar, so breaching the 6.9000 barrier and leading speculators to push the dollar up to 6.9320 in the spot market.
China allowed its currency to slip past a psychological defence level amid sharp losses, a shift that pressured other emerging currencies to depreciate to stay competitive.
Local stocks opened higher as local fund resorted to value buying and as International Monetary Fund (IMF) retained its India growth forecast for the current fiscal.
However, the World Bank agency pared India growth forecast the next fiscal citing the drag from higher crude prices and tightening of the global financial situation.
Also, it lowered global growth forecast which impacted trading activity in the Asian markets.
Market ends on a negative note; Sensex closed over 170 points lower while Nifty ended around 10,300