USD/INR ends at Rs 68.9125/$1 after opening at Rs 68.89/$1 Monday compared to Rs 68.80/$1 at previous close. Dollar/rupee closed up Monday as bets on an aggressive Fed rate cut faded after comments from Fed officials, while higher crude oil prices further aided dollar demand.As bets on 50 bps rate cut by Fed this month reduced, dollar rose. Crude is also trading higher.
Meanwhile, dollar/rupee in the non-deliverable forward (NDF) market maturing in one month traded at Rs 69.25/$1 compared to Rs 69.01/$1 at close of Indian market on Friday.The dollar index, which tracks the trade-weighted movement of the greenback against a basket of six major currencies, traded at 97.27 late monday compared with 97 at close of spot rupee market on Friday.
Federal Reserve Bank of Boston President Eric Rosengren said he doesn't believe the US economy needs an interest rate cut, given the positive data that's rolled in since mid-June.Fed Rosengren acknowledged that growth had slowed since last year and that global risks had increased, but said he still expects the US economy to expand by about 2% this year.However, market is still pricing in a 25 basis points rate cut at the upcoming policy due later this month.
Heightened Middle East tensions not only pushed oil prices higher, but also increased safe haven dollar demand.The most recent trigger was that Iran's Revolutionary Guards on Friday captured a British-flagged oil tanker in the Gulf after UK seized an Iranian vessel earlier this month, further raising tensions along a vital international oil shipping route.Brent crude oil prices for September delivery traded 1.30% higher at $63.28 a barrel.
Sensex ends 306 points lower, Nifty below 11,350.