The rupee settled at 71.7025 against 71.43 at the previous close. The local unit moved in 71.50-71.7875 per dollar band intra-day.
Dollar/rupee ended at six-month high Tuesday on oil importers' demand amid likely FII outflows related to Shell-Mahanagar stake sale and a strong greenback. Oil importers bought dollars all the day. Nationalised banks including State Bank of India, Bank of Baroda, Bank of India, Canara Bank all were buying most likely on behalf of oil importers. Also, there were FII outflows related to the Shell-Mahanagar stake sell supporting the dollar demand. The dollar index, which tracks the movement of the greenback .
The euro hovered around a two-week low versus the dollar as the U.S. currency held strong on Tuesday, boosted by slightly higher Treasury yields, while political uncertainties in Italy also kept the common currency subdued. Yields fell last week to cause an inversion of the short-dated and long-dated yield curve, sending alarms through financial markets given that several recessions in the past have been preceded by yield curve inversions.
The dollar is higher across the board, tracking the rebound in yields. The prospect of Germany embarking on stimulus was the turning point and the dollar has regained momentum since. The dollar index was flat at 98.385 .DXY after rising to a two-and-a-half week high of 98.40 earlier.
Gold prices were steady on Tuesday, after skidding below a key level in the previous session following an uptick in risk appetite, with investors awaiting meetings by policymakers later this week for clues on the path forward for interest rate cuts.
Oil prices rose on Tuesday on optimism U.S.-China trade tensions will ease and on hopes major economies will take stimulus measures to ward off a potential economic slowdown that could hit oil demand. Brent crude LCOc1 was up 25 cents to $59.99 a barrel.
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