Sluggish domestic equities and persistent capital outflows largely pressurised the Indian unit
The dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up by 0.19 per cent at 95.48.
Construction major L&T was the biggest gainer among the Sensex components, spurting 2.30 per cent, after the company said its board has approved a Rs 9,000-crore share buyback plan.
Investors are trying to push ahead with dollar purchases, emboldened by improving market sentiments
'We will supply dollars in case of extreme volatility.'
The rupee had shed four paise at 63.81 against the US dollar in Friday's trade on sustained demand.
Earlier, the rupee resumed slightly lower at 61.70 per dollar as against Tuesday's close of 61.69 at the Interbank Foreign Exchange market.
India's current account deficit narrowed sharply to just $300 million
The dollar index was trading higher by 0.06 per cent against its major global rivals today.
The rupee appreciated by 29 paise to close at 63.38 against the greenback following fresh dollar selling by exporters.
Investors will keenly watch US Fed meet starting Tuesday
Rising production from OPEC as well as the US also weighing on prices
Dealers attributed the rupee's fall to fresh demand for USD.
On Monday, Reserve Bank hiked the lending rates to banks by 2 per cent to 10.25 per cent.
The Indian currency had appreciated by a whopping 85 paise in three-day surge
The rupee had lost 10 paise to close at 21-month low of 64.26 against the greenback in Tuesday's trade.
US dollar was firm against global currencies in overseas markets on rising prospects for a rate hike by US Federal Bank, which hit the rupee sentiment
Increased demand for the dollar from importers affected the value of the rupee
In recent sessions, shares have rallied on hopes Hindu nationalist opposition leader Narendra Modi, a more business-friendly candidate, is seen coming to power on promises of economic revival and jobs.
The rupee declined marginally by 3 paise to 66.03 per dollar on fresh demand for the US currency from banks and importers.
The rupee has dropped by 21 paise or 0.32 per cent in the last two sessions.
US gold futures slid over 1 per cent on Thursday, while silver futures dropped 2 per cent.
The rupee extended gains for the second straight session against the US currency by firming up 21 paise to close at 64.82 a dollar.
Fresh selling of dollars by banks and exporters on the back of good foreign capital inflows helped the rupee
Lacklustre domestic equities alongside ongoing FCNR redemptions added pressure on the local currency
In worldwide trade, the American dollar traded with solid strength against all major emerging currencies
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In New York, the US dollar gained against most rivals on last Friday, as a week of data reassured investors that December's dismal employment report wasn't indicative of a broader shift in the economy.
The greenback rose 9 percent against currencies.
The headline inflation eased to a five-month low in December on lower vegetable prices, providing some relief to the ruling coalition before a national election and increasing the odds that interest rates will stay on hold this month.
On the gaining side, Hero Moto, SBI, HDFC, HUL and L&T have gained between 1-1.4 per cent.
The rupee recovered 14 paise to 66.40 against the dollar in early trade on Monday.
The rupee had lost 15 paise to hit two-week closing low of 60.68 against the dollar in yesterday's trade on consistent demand for the US currency from importers and some banks on strong global cues.
The rupee slipped from its initial gains by 5 paise against the US currency to 67.89 in late morning deals on bouts of dollar demand from importers.
The Reserve Bank on Thursday said its surplus (profit) for the FY'14 fiscal declined 14.75 per cent to Rs 52,679 crore (Rs 526.79 billion) as its interest income from investments in foreign sovereign bonds declined during the year even as its investments increased.
Forex dealers said besides a lower opening in the domestic equity market on fears of a rate hike by the Reserve Bank, higher demand for the American currency from importers put pressure on the rupee but dollar's weakness against other currencies overseas, capped the fall.
The rupee had recovered from its 29-month lows by rising 39 paise to close at 67.63 on Friday.
In worldwide trade, the US dollar retreated from its recent multi-year highs to trade subdued against major rival currencies
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In the global market, the dollar was quoted lower in the early trade with investors looking ahead to the following day's European Central Bank policy decision.
The rupee which has been relatively stable over the last couple of months after having seen as much as 20 percent fall to a record low in late August has been boosted mainly by robust foreign fund inflows into the stock market.
In forward market, premium for dollar declined in view of mild receivings from exporters.
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