The US currency's decline against major world currencies alongside fag-end dollar supply largely helped the rupee recoup some of its initial losses
The S&P BSE Sensex plunged 128 points to end at 25,102.
In worldwide trade, the US dollar continued its highly bullish trend against all major emerging market currencies
The Rupee is seen recovering from its all-time lows against the dollar.
In the global market, the US dollar index, which tracks the greenback against a basket of six major rivals, was up by 0.33 per cent.
The rupee ended marginally higher by two paise at 62.24 against the dollar on Wednesday.
The domestic currency had last touched 65-level and ended at 65.24 on September 6, 2013. It moved in a range of 64.63 and 65.23 during the day.
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
Weakness of dollar in the overseas market also boosted the rupee value.
The rupee on Wednesday snapped its two days of losses and edged up two paise to end at 59.27 against the dollar following late selling of the US currency by exporters.
Rupee has gained by 15 paise or 0.24 per cent in two days.
The dollar index was down 0.01 per cent at 95.86 against a basket of six currencies in early trade
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.
Foreign fund inflows and a higher opening in the domestic equity market supported the domestic unit
A firming trend in domestic stock markets, however, capped the rupee fall to some extent
Sustained capital inflows supporting the rupee sentiment, a forex dealer said.
A sustained rise in equity market also boosted the rupee sentiment.
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.
Sharp fall in domestic stock market also affected the rupee sentiment.
Tracking a recovery in local shares, the Indian rupee on Friday snapped a two-day declining trend and bounced back by 39 paise to end at 61.44 against the Greenback on fresh dollar selling by exporters and some banks.
The rupee has dropped by 83 paise or 1.24 per cent in three days
A weakening dollar against other currencies overseas supported the rupee.
Falling for the fourth day in succession, the rupee today dipped by 23 paise to close at nearly three-week low of 59.38 against the dollar amidst the RBI announcing an SLR cut that is expected to release nearly Rs 40,000 crore into markets.
RBI fixed the reference rate for the dollar at 66.2930 and euro at 74.8978.
Persistent foreign capital inflows also boosted sentiment.
The domestic currency has gained 9 paise or 0.13 per cent in two days.
The dollar's weakness against some currencies overseas limited the rupee's fall.
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 rupee had recovered from its 29-month lows by rising 39 paise to close at 67.63 on Friday.
The rupee on Monday plunged to a two-week low of 66.61 by falling 47 paise against the US dollar on heavy demand for the American currency from importers.
The American currency regained its buoyant strength after a brief sideways movement following overnight US Fed's optimistic tone about the future of the US economy
The Rupee is seen strengthening against the dollar.
Rupee down 13 paise to 66.72 against dollar
The rupee fell to more than one-month low of 65.75 against the US dollar on Thursday.
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
The trading range for the Spot USD/INR pair is expected to be within 66.20 to 67.00.
Finance Minister P Chidambaram on Monday said the currency will find its level as steps being taken by the government to contain fiscal and current account deficits will improve investor sentiments.
