The rupee has lost 23 paise or 0.35 per cent in two days.
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.
In New York, the dollar fell against other major currencies on Monday after a December reading on the US services sector came in below market expectations.
The rupee ended lower by six paise at 65.73 against the US dollar on Monday.
The dollar index, a gauge of six major currencies, was down by 0.13 per cent as it lost ground against the euro following a better-than-expected survey of German sentiment.
The rupee on Wednesday dropped by 73 paise to 61.20 in the late morning deals on persistent month-end dollar demand from importers on the back of strengthening in the US currency overseas.
A lower opening of the domestic equity market put pressure on the rupee.
The US dollar bought 99.40 yen in Asian trade, compared with 99.21 in North American trade late on Monday.
SBI managing director PK Gupta told reporters that the rupee has been faring better than many of its peers, including the Turkish, Argentinean, and Indonesian currencies.
Forex dealers said besides dollar weakening against the euro in overseas markets, higher opening in the equity market and increased foreign funds inflows mainly supported the rupee.
This is the first time since June 27 that the domestic currency has fallen below the 60 level.
Finance Minister P Chidambaram in an interview to PTI on Monday said, 'sentiment will turn in favour' of the rupee as government is 'committed to containing the fiscal deficit' within target and is addressing how to finance CAD.
The local currency had gained five paise to close at 66.35 in Monday's trade.
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.
Forex dealers said besides dollar gaining against other currencies in the global markets, a lower opening in the domestic equity market also, influenced the rupee.
The industrial production grew by two per cent in September, mainly on account of better performance by power and mining sectors.
The dollar index was down by around 0.15 per cent against a basket of six major global currencies.
Besides, dollar's weakness against some Asian currencies supported the local unit, forex dealers said.
The rupee on Monday appreciated by 11 paise to 54.64 against the US dollar in early trade at the Interbank Foreign Exchange, aided by selling of the American currency by exporters and banks.
The rupee had lost 21 paise to end at new 10-month low of 56.38 against the dollar on Thursday on fag-end spurt in dollar demand after RBI Governor D Subbarao painted a dim macroeconomic picture.
The local currency had surged 35 paise to 63.65 in Thursday's trade.
The rupee is seen weakening against dollar in current week.
The Indian rupee on Monday appreciated by 16 paise against the American currency in early trade on hopes of increased capital inflows from foreign funds boosted by last week's rally in the stock markets.
Cautious optimism over US-China trade talks after US President Trump said his trade negotiators had received two "very good calls" from Beijing also influenced the local currency, dealers said.
On a weekly basis, the rupee fell by 1.36 per cent or 75 paise as dollar demand outweighed supply and stocks fell.
Even as rupee fell below 56-level against dollar intra-day, Chief Economic Adviser in the Finance Ministry Raghuram Rajan said, there is no need to panic, and RBI takes decisions on whether to intervene in forex markets or not to stabilise the local currency.
This is rupee's lowest closing since 55.45 on November 27, 2012.
Forex dealers said weakness in local equities and a firm dollar overseas against other currencies also weighed on the rupee.
However, foreign capital inflows into equity market restricted the rupee's fall to some extent.
Indian stocks and the rupee have benefitted from dollar liquidity induced by the US Fed stimulus.
The dollar index was up by 0.10 per cent against a basket of six major global rivals, ahead of a slew of data that could offer more evidence on whether an economic recovery is under way in the US.
Rupee had last ended at 54.81-level a dollar on April 5.
The dollar index was last trading up by 0.04 per cent against a basket of six major global rivals.
The dollar index was up by 0.04 per cent against a basket of six major global rivals.
Forex dealers said month-end dollar demand from oil importers and dollar's gain against other currencies overseas, also put pressure on the rupee.
Banks and importers preferred to increase their dollar position at the current level, a forex dealer said.
The US dollar index was up by 0.16 per cent at 96.53.
The rupee resumed lower at 54.73 per dollar as against the last closing level of 54.69 on the Interbank Foreign Exchange Market.
The rupee's upward movement was aided by a good dose of dollar selling by exporters and some banks, amid a weak dollar overseas, said forex dealers.
The rupee had lost 11 paise to close at 66.44 against the dollar.
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