Dollar closed at 63.5700 against its opening at 63.6600. Dollar in the offshore market extended gains on risk aversion on profit taking after testing fresh record a day earlier amid Federal Reserve Janet Yellen's final monetary policy meeting as Chair and caution over Union Budget 2018-19 due on Feb 1. While, globally subdued dollar may cap further upside in the spot pair. The greenback remained subdued against its major peers as euro rose after the European Union statistics agency said Tuesday that a surging economy in France, which had until recently lagged behind its peers, helped the 19-nation currency union grow at a 2.5% rate in 2017, the fastest since 2007. Federal Open Market Committee started its two-day monetary policy and is scheduled to announce its outcome later today. Market participants expect the Fed to hold short-term interest rates steady while the central bank's policy statement could signal whether officials intend to raise rates at a quicker pace than expected this year.
Dollar may get a boost on expectations of rising rates, making the currency more attractive to yield-seeking investors.
BSE Sensex closed lower by 68.71 points to 35,965.02, while the Nifty 50 fell 21.95 points to close at 11,027.70.
INTERNATIONAL
Asia stocks pulled further back from record highs as the recent rise in global bond yields weighed on equities, while the dollar steadied ahead of the Federal Reserve’s policy decision.
South Korea has uncovered cryptocurrency crimes worth 637.5 billion won ($594.35 million), which includes illegal foreign exchange trading, a statement released by the country's customs service said on Wednesday.
Oil prices fell for a third day after data from an industry body showed crude stocks rose more than expected last week, while a selloff in other commodities, stocks and bonds added to investors' bearish mood.
Britain is seeking a free trade agreement with China, Prime Minister Theresa May said on Wednesday as she flew to the country for talks with Chinese leaders, adding that more should be done immediately to open up market access for British firms.
Gold prices rose in Asia as President Donald Trump urged bipartisan cooperation on overhauling US immigration policies and rebuilding infrastructure in an address to Congress on Tuesday night.