Significant investors in government bonds FIIs have been net sellers since May 22.
The rupee showed range-bound movement on Wednesday as investors preferred to stay cautious in the unsure market.
BofA-ML revised its end-2015 rupee-dollar forecast to 60 from 64 earlier.
Inflows from Europe, falling crude oil to come to the rescue if rupee cracks against the dollar.
In the forward market, the premium for dollar moved up on fresh paying pressure corporates.
The rupee has fallen 0.8 per cent so far this year, hitting a one-month low on Friday, hurt by a stronger dollar globally as well as caution ahead of key economic data this month.
Rupee is under pressure against the dollar say currency watchers.
Weakness of dollar in the global markets and foreign capital outflows also affected the rupee sentiment.
The Indian rupee ended slightly lower at 64.01/02 per dollar compared with Tuesday's close of 63.98/99 per dollar due to month-end dollar demand by importers.
The rupee has depreciated 2.35 per cent in the past three months and one per cent in the past month, despite strong capital flows and falling oil prices.
Some experts, however, see a silver lining in the fall and said the volatility has come down sharply and that bodes well for the Indian currency
Increased month-end demand for the US currency from importers put pressure on the rupee
Bucking a strong trend in share market, the Indian rupee on Monday gave up all its initial gains and slipped 18 paise to close at 61.94 against the Greenback on rising dollar demand from importers.
The immediate concern for the rupee is the sharp spike in oil prices
Benchmark share indices opened lower on Monday, amid weak global cues, as investors turned cautious ahead of the US Federal Reserve stance on interest rate.
Extending its losing streak for the fourth straight day, the rupee weakened by five paise to 61.01 against the US dollar in early trade today at the Interbank Foreign Exchange market on high demand for the American currency from importers.
The Rupee is seen strengthening against the dollar.
The dollar strengthened against major world currencies.
Forex dealers said besides dollar's gains against other currencies, fresh demand for the American unit from importers and a weak opening in the domestic equity market put pressure on the rupee.
Market experts on why the bulls will be on the rampage first thing on Monday after the scrapping of enhanced surcharge on FPIs and other measures to ease the systemic liquidity squeeze and boost demand. Prasanna D Zore reports.
There's sustained demand for the American currency from importers and banks
The rupee depreciated further by 7 paise to 65.12.
The rupee largely shrugged off the high volatility in stocks and rebounded sharply towards the fag-end trade following bout of dollar selling by exporters
India Ratings on Mondy projected a 7.7 per cent growth this fiscal driven by consumption demand.
Hawkish guidance by the US Fed raises concerns it could tie the hands of RBI from trimming rates.
The rupee had gained 6 paise to close at 60.07 against the dollar in Thursday's trade on fresh selling of the American currency by banks and exporters in view of strong capital inflows.
If you plan to send your child to the US five years from now and expect the rupee to depreciate five per cent every year, adding US funds to your portfolio might be a good idea, says Ashley Coutinho.
Global currency market sentiment is likely to be driven by the US deficit and debt ceiling negotiations, with markets likely to turn more risk averse closer to October 17, the date by which the US Congress must approve raising the country's borrowing limit.
The improvement in the current account deficit is expected to provide a major reprieve to the government and the Reserve Bank of India which have been battling to prop up the rupee.
In line with rally in stocks, the Indian rupee on Monday appreciated for the second straight session and closed with a eight paise gain at a one-week high of 61.36 against the Greenback.
The dollar gained against other currencies overseas.
French stocks, particularly those exposed to the country's large tourism sector, are likely to suffer the biggest falls
Surging value of dollar may be posing the biggest threat to US corporate earnings.
The falls meant that both crude futures were at their lowest levels since mid-April
The rupee recovered by 11 paise to trade at 60.84 against the US dollar in early trade today on selling of the American currency by banks and exporters.
The central bank will auction Rs 220,00 crore (Rs 220 billion) of government cash management bills every Monday, it said in a statement, without specifying for how many weeks the sales would last.
The rupee had last ended at 67.22 per dollar on March 16, 2016.
Investors brace up ahead of the key macrodata- IIP and CPI numbers due to be unveiled tomorrow.
Indian rupee appreciated by 35 paise to end at two-week high of 63.03 against the greenback.
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