USD/INR closed at 72.69 against its open 72.89.Dollar ended up Tuesday as Brent crude oil prices surged above $82 a barrel leading to increased demand for the greenback from oil importers.Also, some foreign banks bought dollars tracking a general risk aversion in the market owing to ongoing US-China trade tension..Mainly oil bids kept alive dollar demand today as Brent touched $82/bbl. Also, few foreign banks including Standard Chartered Bank and Citi Bank were on the buy-side.
While, the Reserve Bank of India intervened around Rs 72.95/$1 to stem further gains in the spot pair. Nationalised banks sold dollars on behalf of RBI.
Also, Russian and OPEC refused to raise production despite warning from US President Trump on rising prices.
Brent crude oil futures for November delivery traded 0.26% higher at $81.41 per barrel during Asian trade Tuesday.
Adding to this, dollar remained steady against other major currencies as investors' focus shifted to the upcoming Fed policy, wherein policymakers are widely expected to hike rates this week, as financial markets fret over a heated Sino-US trade dispute.
Dollar Index, which weighs the greenback against a basked of six major currencies traded at 94.32 on Tuesday compared to 94.25 at close of trading session in New York.
On Monday, the US and China imposed new round of tariffs on each other's goods with no sign either side is willing to back down.
The Fed is scheduled to begin its two-day policy meeting later today at which it is expected to raise interest rates for the eight since late 2015.
Markets are also betting on another rate hike before year-end, though the outlook for 2019 is less clear.
Sensex provisionally ends 379 points higher with 20 components in the green.