The local currency recovered some ground after the Reserve Bank of India (RBI) was said to have stepped in through state-run banks, helping the rupee to end at 64.30, a fall of 110 paise or 1.74 per cent.
Rupee closed at 61.86 against the dollar on Tuesday.
The global brokerage firm further said that BoP would be INR-supportive.
The US dollar surged to fresh one-year high after the Fed chief's testimony to the US Senate on Wednesday bolstered the expectations of interest rate hikes, though gradually.
The Indian rupee had lost 10 paise to close at 64 on Thursday.
The rupee has depreciated by about 25 per cent in the past three months, from close to Rs 83 in mid-May, while it was even higher at about Rs 80 against the British Pound in March.
Strong foreign fund inflows, a weakening dollar and slipping oil prices propped up the local unit.
The Indian rupee on Thursday appreciated by 12 paise to end at 66.71.
The rupee on Tuesday tumbled by 32 paise to close at 64.17 on fresh dollar demand from importers.
However, the hefty initial gains of the rupee, which had jumped to 61.05 intra-day, were substantially erased on month-end demand for US dollars from private oil firms and some defence-related purchases, amid fall in domestic stocks.
Indian rupee washed out initial losses against the greenback.
Concerns related to capital outflows in the aftermath of the first US interest rate hike in nearly a decade predominantly weighed on the rupee trade.
The rupee recovered by 13 paise to close at 66.31 per dollar on fresh selling of dollars by banks and exporters despite fall in equity market.
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.
Forex dealers said strengthening of the euro against the dollar overseas and a higher opening in the domestic equity market also supported the local currency.
The rupee had recovered by 8 paise to close at 66.91 in Tuesday's trade.
The rupee firmed up by 15 paise to close at 62.36 per dollar on fresh selling by banks
the rupee had closed steady at 67.95 per dollar on Monday.
The rupee appreciated 7 paise to 79.74 against the US dollar in early trade on Thursday as a positive trend in domestic equities supported the local unit. However, a strong American currency overseas and forex outflows restricted the rupee's gain, dealers said. At the interbank foreign exchange, the rupee opened at 79.72 against the American dollar, then went lower to trade at 79.74 against the greenback in early deals, registering a gain of 7 paise over the last close.
Forex dealers said dollar's weakness against other currencies overseas supported the rupee.
Rupee hits more than two-year low; RBI intervenes
The rupee is expected to remain under pressure in the near term, given the strengthening of the dollar against major global currencies and widening of the trade deficit.
Exchange-traded currency derivatives volumes are likely to drop in view of new Reserve Bank of India (RBI) rules, casting a cloud over further participation of retail investors and proprietary traders. There are concerns that existing positions without any underlying exposure will need to be liquidated. Also, weighed down by dollar demand from local oil companies and weakness in its Asian peers, the rupee on Wednesday (April 3) ended at a new closing low of 83.44 versus the US currency.
The dollar index was down by 0.02 per cent against a basket of six major currencies.
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The rupee gained 8 paise to close at over two-week high of 61.23 against the US dollar in the previous session.
Rupee weakened by 10 paise to end at 66.14 against the dollar due to month-end demand from importers and banks.
In forward market, premium for dollar continued to fall due to persistent receivings from exporters.
The rupee fell because of fresh demand for dollar from importers.
The US dollar index was up by 0.16 per cent at 96.53.
The domestic currency had lost 15 paise to close at 63.82 on Wednesday.
The rupee on Wednesday strengthened by another 3 paise to 62.82 against the US dollar.
Rupee hits 2-month low against dollar on US rate hike fears.
The rupee had ended 11 paise higher at 62.20 on Tuesday.
Domestic equity markets opened with losses which capped the rupee gains.
Sustained rise in equity markets in view of progress in monsoon mainly boosted the rupee value against the dollar.
The rupee appreciated further on Thursday, adding 106 paise to 66.01 against the dollar, after steps taken by new Reserve Bank of India Governor Raghuram Rajan to attract US currency inflows boosted market sentiment.
The battered rupee gained 225 paise to 66.55 against the dollar today, the most in at least 15 years, after the Reserve Bank of India eased pressure in the currency market by starting a facility for state-run oil refiners to buy foreign exchange.
The dollar index surged to multi-year high.
The rupee closed almost flat at 65.76 against the US dollar on some demand for the American currency from banks.
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Fag-end dollar selling by exporters helped the rupee to recover lost ground and settle at the day's high of 60.77, a gain of 11 paise. The rupee earlier touched an intra-day low of 61.21 on July 8.
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