Dollar closed at 65.1675 against its opening of 65.0600. Dollar in the offshore market traded up during European trades tracking the strength of the greenback ahead of FOMC meeting later this week. The greenback surged against its major peers after an upbeat US economic data amid potential impact of US tariffs on steel and aluminium.
On the US economic front, University of Michigan said the preliminary reading on its consumer sentiment index for March came in at 102.0, up from the final February reading of 99.7. Meanwhile, a separate report from the Federal Reserve showed a substantial rebound in industrial production in the month of February. The Fed said industrial production surged up by 1.1% in February after dipping by a revised 0.3% in January. On the other hand, the Commerce Department released a report showing a pullback in new residential construction in the month of February.
The report said housing starts dropped by 7.0% to an annual rate of 1.236 million in February after jumping by 10.1% to a revised 1.329 million in January.
With the Fed widely expected to raise interest rates by 25 basis points, investors are likely to keep an eye on the accompanying statement for clues about the outlook for future rate hikes. New Fed Chairman Jerome Powell's first press conference as head of the central bank will also attract considerable attention. Asian markets traded on a mixed note Monday as investors also turn their attention to the Federal Reserve's two-day policy meeting later in the week.
BSE Sensex closed lower by 252.88 points at 32,923.12, while the Nifty 50 fell 100.90 points.
INTERNATIONAL
Asian share markets slipped into the red on Monday as caution gripped investors in a week in which the Federal Reserve is likely to hike U.S. interest rates and perhaps signal that as many as three more lie in store for the rest of the year.
Worries about the potential for a U.S.-China trade war and frustration over U.S. President Donald Trump’s steel and aluminum tariffs threatened to dominate a gathering of finance leaders this week amid strengthening growth.
Gold prices held steady as political tensions between the United Kingdom and Russia supported safe haven bids despite a firmer dollar, with markets also eyeing a possible U.S. rate hike next week.
Oil prices fell as increased drilling in the United States pointed to more output, raising concerns about a return of oversupply.Monday’s price falls in part reversed increases last Friday, which came on concerns over tensions in the Middle East.