Dollar is closed at 65.4450 against its opening of 65.2400. Dollar extend gains during intraday trades on buying by oil importers dollar for their month-end demand amid global risk-off appeal on escalating tensions between US and North Korea. Global risk sentiments have plunged after North Korea's intimidating remarks, putting pressure on the rupee. Also, importers month-end dollar buying is getting offset by selling by exporters. Asian stocks little change as investors remained cautious over threats from North Korean foreign minister to shoot down US airplanes in self-defence while claiming the US has declared war on the secluded nation. North Korean Foreign Minister Ri Yong Ho claimed recent comments by President Donald Trump represent a "declaration of war."

Also, minutes from the bank's Jul 19-20 meeting showed that policy makers continue to see moderate expansion of the world's third largest economy. Also, Japanese Prime Minister, Shinzo Abe announced early elections taking advantage of increased ratings amongst the citizens. On the contrary, Federal Reserve Bank of Chicago President Charles Evans said Monday he is "open-minded" about raising short-term interest rates at one of the central bank's next few monetary policy meetings. However, Evans wants the US inflation to rise before nudging borrowing costs higher again.   

BSE Sensex closed lower by 27 points to 31,600 while the Nifty 50 edged down 1.10 points to 9,872.

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Asian shares withered and the yen firmed against the backdrop of rising tensions on the Korean Peninsula, and as investors awaited fresh signals about the U.S. monetary policy outlook.

North Korea has been boosting defences on its east coast, South Korea’s Yonhap news agency said on Tuesday, after the North said U.S. President Donald Trump had declared war and that it would shoot down U.S. bombers flying near the Korean peninsula.

Gold held steady after rising over one percent in the previous session, supported by safe-haven demand amid rising tensions surrounding North Korea and as the dollar eased from near three-week highs.

Oil prices extended gains, with Brent crude hitting a 26-month high, supported by Turkey’s threat to cut crude flows from Iraq’s Kurdistan region to the outside world.