The rupee ended marginally higher by three paise at 68.58 against the US dollar on mild selling of the American currency by banks and exporters despite higher greenback in overseas markets.
The domestic currency resumed lower at 68.65 as against previous closing level of 68.61 at Interbank Foreign Exchange (Forex) market and dropped further to 68.70 on initial dollar demand from banks and importers.
However, it recovered afterwards to 68.45 on fag-end selling of dollars by banks and exporters before finishing at 68.58, showing a mere gain of 3 paise or 0.04 per cent.
The rupee had dropped 15 paise or 0.22 per cent yesterday.
The dollar index was up 0.01 per cent against a basket of six currencies during late afternoon trade.
In global markets, the yen gained broadly in Asian trade today as risky assets lost traction and revived demand for the safe-haven currency, while the sterling and the euro were shaky after suffering hefty losses on uncertainty over Britain's membership in the European Union.
Pramit Brahmbhatt of Veracity Financial Services said," Today, the rupee opened on a weaker note compared to close of yesterday's trading session.
"But, as expected, it found support near 68.70 levels. This gain was despite heavy selloff in domestic equity market."
Meanwhile, the benchmark BSE Sensex ended lower by 378.61 points, or 1.59 per cent, at 23,410.18.
In forward market, premium for the dollar dropped on fresh receivings from exporters.
The benchmark six-month premium for July contract fell to 196-198 paise from 199-201 paise yesterday and far forward January 2017 contract also dropped to 414-416 paise from 422-424 paise previously.
The Reserve Bank fixed the reference rate for the dollar at 68.64 and for the euro at 75.76.
In cross-currency trades, the rupee firmed up further against the pound sterling to finish at 96.75 from 96.97 yesterday and also hardened against the euro at 75.46 as against 75.85 previously.
However, the local currency dropped further against the yen to finish at 61.18 per 100 yen from 60.54 earlier.
