FIIs today pumped in Rs 591 crore in stocks, provisional data from stock exchanges showed.
The rupee on Monday rose by 5 paise to trade at 55.35 against the US dollar in early trade at the Interbank Foreign Exchange as the American currency weakened against euro overseas.
Fresh demand for dollars from banks and importers in view of firm dollar in the overseas market mainly affected the rupee value against the US unit, a forex dealer said.
Increased selling of the US dollar by exporters supported the rupee.
The US dollar index, which tracks the greenback against a basket of six major currencies, was 0.38 per cent lower at 95.41.
Dealers said besides higher opening in local equities and selling of the US currency by exporters, euro's gains against the American currency on positive developments in Greece supported the rupee.
Dealers attributed the rupee's fall to increased demand.
The rupee on Monday gained for the first time in three days and closed up 12 paise to 62.56 against the dollar on fag-end sales of the US currency.
Forex dealers said month-end dollar demand from oil importers and dollar's gain against other currencies overseas, also put pressure on the rupee.
A higher opening in domestic stock market supported the rupee.
The rupee had recorded its biggest slump in two months by plunging 57 paise to close at 55.07 in previous session on Friday.
Dealers attributed the rupee's fall to increased demand for the US currency from importers.
Falling for the second day, the rupee on Thursday weakened by 14 paise to close at 54.46 tracking losses in Indian stocks amid sustained dollar demand from importers.
The rupee appreciated for the second straight day to close 14 paise higher at 54.54 on optimism that government would get Parliamentary approval to FDI in multi-brand retail, leading to big inflow of dollars.
Dollar's weakness against some other currencies overseas supported the rupee.
Forex dealers said a higher opening in the domestic equity market and strengthening of euro against the dollar overseas also supported the rupee.
This is rupee's lowest since 62.32 on January 9.
The Indian rupee continued its downward march and fell by another 48 paise to 46.53 against the US dollar in early trade on Tuesday owing to melting Asian stock markets amid heavy demand for the greenback.
Despite a heavy battering, the rupee on Tuesday made a smart recovery to close at 63.25 after hitting a fresh low of 64.13 against the US dollar, helped by RBI's massive intervention.
The local currency had gained 10 paise to close at 63.51.
The Rupee is likely to recover during day trad, say currency watchers.
Fresh dollar selling by exporters on hopes of fall in the USD after downward revision to that country's first quarter GDP growth also helped rupee recover as hopes surfaced that the Fed may delay the plan to taper of monetary stimulus.
The markets had touched their highest levels in a month.
Forex dealers said weakness in local equities and a firm dollar overseas against other currencies also weighed on the rupee.
Indian stocks and the rupee have benefitted from dollar liquidity induced by the US Fed stimulus.
Due to weakness in domestic equities and strong dollar demand, rupee shed its month and a half high against follar.
Strengthening of euro against the dollar in overseas market and a higher opening in the equity market supported the rupee.
The rupee depreciated further by 13 paise to hit a new life-time closing low of 82.30 against the US dollar on Friday as a firm American currency and risk-averse sentiment among investors weighed on the local unit. Moreover, a negative trend in domestic equities and elevated crude oil prices sapped investor appetite, forex traders said. At the interbank foreign exchange market, the local currency opened at 82.19, then fell further to 82.43. It finally settled at an all-time low of 82.30 against the American currency, registering a decline of 13 paise over its previous close.
Bearish domestic equities restricted the rupee rise.
The local currency had lost 16 paise to close at 54.17 on Monday due to fresh dollar demand from importers and some banks.
Forex dealers said euro's gains against the American currency in the overseas market also supported the rupee.
Extending losses for the third straight session, the rupee today lost 28 paise to end at an over one-week low of 53.50, due to sustained dollar demand from importers amid sluggish local stocks.
Erasing early gains, the rupee on Thursday closed six paise lower at 53.22 due to sustained dollar demand after government estimates pegged ongoing fiscal's GDP growth at a decade low of five per cent.
This is the second biggest rise since September 21 last year, when rupee had gained by 93 paise, or 1.71 per cent.
Forex dealers said a firm rise in local equities and sluggish dollar overseas also boosted the sentiment in rupee's favour.
Forex dealers said firm local equities, signs of consistent capital inflows and sustained dollar selling by exporters also boosted the rupee sentiment.
The rupee strengthened by 36 paise to 54.48 against the US dollar in early trade today at the Interbank Foreign Exchange on selling of American currency by exporters and banks.
Dealers said firm local equities amid sustained capital inflows limited the rupee's fall.
The rupee has lost 23 paise or 0.35 per cent in two days.
The rupee had lost 52 paise to close at 54.08 against the dollar on Tuesday on heavy month-end dollar demand from importers and corporates.
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