The rupee on Monday fell by 40 paise to 59.96 in early trade on the Interbank Foreign Exchange market, weighed down by dollar's gains against other currencies in global markets.
Forex dealers attributed the rupee's fall to increased dollar demand from importers amidst rising global crude prices
A higher opening in domestic stock market supported the rupee.
The rupee had rose by a staggering 80 paise, its biggest single-day gain in last nine months, to close at 59.39 amid signs of strong fund inflows on Friday.
Falling for the first time in three days, the rupee washed out initial gains to end four paise lower at 62.57 today on caution ahead of US non-farm payrolls data and sustained capital outflows from Indian markets.
In line with equity market, the rupee trimmed its initial losses but was quoted still lower by 17 paise on dollar demand from banks and importers despite weakness of the US currency overseas.
Traders will watch out for any Reserve Bank of India intervention to prevent the rupee from weakening further.
The rupee on Friday again breached the 56-mark by losing 31 paise to 56.15 against the US dollar in early trade to hit a fresh one-week low, due to strong demand for the American currency from banks and importers.
Selling of dollars by exporters helped the Indian currency appreciate.
Bouts of dollar demand from importers put pressure on the rupee
In International market, the US dollar fell further in early trade on Monday, losing further steam in the wake of Friday's weaker-than-expected economic-growth number and caution ahead of what is expected to be a busy week of data and monetary-policy decisions.
Rupee gained on fresh selling of dollars by banks ahead of the RBI policy meeting.
Weakening of the dollar against other currencies overseas, following disappointing economic data and a higher opening in the domestic equity market, supported the rupee.
The rupee had gained 90 paise, or 1.34 per cent.
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 increased dollar selling by exporters, a higher opening in domestic equity market and yen's gain against the American currency overseas helped the rupee to recover.
Sustained dollar sales by exporters and banks on behalf of their clients also boosted rupee sentiment even as the dollar index was marginally up in overseas markets, said traders.
Weak dollar in the overseas market also boosted the rupee value against the dollar, a forex dealer said.
The rupee had gained 18 paise to 55.43 against the dollar in Monday's trade.
A higher opening in the domestic stock market buoyed the rupee sentiment
Forex traders said a stronger dollar also dragged the rupee down.
Brokers said a weak trend in euro in overseas markets also dampened the rupee sentiment against the US dollar.
The rupee had ended 47 paise higher at 60.14 against the US currency in the previous session.
Forex dealers said besides dollar's gains against euro in the overseas markets on worsening euro-zone debt crisis amid growing fears that Spain may need a full bailout, a weak opening in the stock market also put pressure on the local unit.
Strengthening of the euro against the US dollar overseas also supported the rupee.
Increased demand for the US currency from importers put pressure on the rupee.
Forex dealers said fresh demand for the dollar also put pressure on the rupee.
The US Fed kept its near-zero benchmark interest rate unchanged.
In New York, dollar erased most of its losses on last Friday after the euro briefly jumped following more comments from European Central Bank President Mario Draghi about policy options.
The rupee had strengthened by eight paise to close at 60.13 a dollar on Thursday, following firm local equities and fresh currency sales by exporters.
The rupee fell to a record low of 59.9350 to the dollar, breaching past its all-time low of 58.98 on June 11.
Dealers attributed the rupee's fall to increased demand.
At the Interbank Foreign Exchange market, the domestic unit resumed lower at 54.42 a dollar from last weekend's close of 54.28 and declined further to a low of 54.52 on initial hesitancy in share markets and dollar demand from importers, mainly oil refiners, and some banks.
The rupee had lost 23 paise to end at 54.09 in Tuesday's trade due to month-end dollar demand.
Forex dealers said persistent capital inflows and bearish dollar overseas also boosted the rupee sentiment in Mumbai.
Foreign institutional investors pumped in nearly $60 million (Rs 321.26 crore) into local equities, according to BSE provisional data.
The rupee was hovering in a range of 66.65 and 66.89 in morning trade.
At Forex market, the domestic unit commenced lower at 53.95 a dollar from previous close of 53.81and moved in a restricted range of 53.88 and 54.06 before settling at 53.94, showing a fall of 13 paise, or 0.24 per cent.
The rupee had gained by 57 paise, or 1.04 per cent, in previous two days.
It moved in a range of 54.87 and 55.02 per dollar during the morning deals.
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