The rupee settled at 68.86 against 68.73 at the previous close. The local unit moved in 68.66-68.8750 per dollar band intra-day.
Dollar/rupee ended up Tuesday on likely overseas outflows from local stocks, while rising crude oil prices and strong greenback ahead of the Federal Reserve policy aided further gains in spot. Foreign banks were on the buy-side, mostly on behalf of overseas investors who pulled out of local equities. Also, crude is nearly 1% up and dollar is strong ahead of the FOMC policy. Few nationalised banks bought dollars mostly on behalf of Reserve Bank of India.
The British pound hit new two-year lows on Tuesday as the refusal of either the U.K. or the European Union to change its negotiation positions increased the likelihood of a disruptive Brexit on October 31. The pound had recovered marginally to stand at $1.2141 against the dollar and 1.0902 against the euro, down 0.6% and 0.5% on the day, respectively.
The euro hovered on Tuesday around the 26-month low it reached last week against the dollar as investors awaited to see whether the Federal Reserve would signal the start of an interest rate-cutting cycle. Nearly three cuts are priced in the money markets by the end of this year.
Oil prices rose for a fourth day on Tuesday on optimism the U.S. Federal Reserve will this week cut interest rates for the first time in more than 10 years, supporting fuel consumption in the world's biggest oil user.
Gold prices ticked down on Tuesday as the dollar rose to a two-month high, while investors awaited the outcome of a two-day U.S. Federal Reserve policy meeting expected to result in a cut in interest rates.
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