Lower dollar in the overseas market also boosted the rupee value
The rupee recouped by 8 paise to end at 67.27 against the American currency on fag-end selling of dollars by banks and exporters in view of sustained foreign capital inflows into domestic equities.
Lower dollar in the overseas market also boosted the rupee value against the dollar, a forex dealer said.
The Indian rupee opened lower at 67.41 as against Monday's closing level of 67.35 per dollar at the Interbank Foreign Exchange (Forex) market and dropped further to 67.43 on initial dollar demand from importers.
But, it recovered afterwards to 67.25 on fag-end selling of dollars by banks and exporters before ending at 67.27, showing a gain of 8 paise or 0.12 per cent.
The domestic unit hovered in a range of 67.25 and 67.43 per dollar during the day.
The dollar index was trading down by 0.19 per cent against a basket of six currencies in the late afternoon trade.
Meanwhile, the RBI fixed the reference rate for the dollar at 67.3680 and euro at 74.1654.
In cross-currency trades, the rupee recovered against the pound sterling to close at 88.26 from 88.41 previously while fell further against the euro to settle at 74.01 from 73.97 previously.
The domestic currency also dropped further against the Japanese yen to 64.45 per 100 yen from 63.38.
In overseas market, the dollar slipped ahead of the US Federal Reserve's two-day policy meeting today, while the yen gained despite expectations that the Bank of Japan will ease later this week.
The yen strengthened against its rival currencies during the late Asian trade today, hitting its highest level against the dollar since mid-July, as expectations receded for policy steps Tokyo will likely put together.
In the forward market, premium for dollar showed a mixedtrend due to uneven demand and supply transactions.
The benchmark six-month premium for December moved down to 172-172.5 paise from 172-174 paise yesterday while forward June 2017 contract inched up to 370.5-371 paise from 369-371 paise.
Oil prices edged away from three-month lows at Asia trade, supported by a weaker dollar, but concerns of ongoing oversupply weighed on markets and many traders are raising their bets on further price falls.
Meanwhile, the benchmark Sensex dropped by 118.82 points or 0.42 per cent to end at 27,976.52.
