USD/INR closed at 72.6850 against its open at 72.30. Dollar ended at fresh record low Tuesday as the ongoing Sino-US trade conflict continued to increase demand for safe-haven dollar as overseas investors turned risk averse leading to outflows from both Indian stocks and debt.
However, mounting worries about US-China trade dispute after US President Donald Trump hinted at imposing additional tariffs of $267 billion on Chinese goods helped the spot pare losses.
The greenback traded mixed as lack of US economic data kept some investors on the sidelines at the start of the new trading week.
Things will begin to pick up on the economic front on Wednesday. The producer price index will be released Wednesday morning and the Beige Book is set to be released in the afternoon.
Indian shares opened higher Tuesday on local fund buying in select stocks and stronger rupee boosted investor sentiment.
Recovery in Asian shares also aided to index rally. Meanwhile, investors would continue to watch currency movements besides awaiting European Central Bank interest rate decision this week.
Sensex provisionally ends 535 points lower with 24 components in the red.