The Indian unit opened sharply higher at 64.80 as against Wednesday's closing level of 65.12.
The rupee resumed lower at 61.15 per dollar as against the last weekend's level of 61.07 at the Interbank Foreign Exchange market and hovered in the range of 61.15 and 61.28 before quoting at 61.24 per dollar at 1030 hours.
The rupee came under pressure on demand from importers as the dollar strengthened overseas.
Rupee gained on increased selling of the US currency by banks and exporters
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In the global market, the US dollar rose against the basket currencies in early trade as US President Barack Obama called for diplomacy in dealing with alleged chemical weapons attack in Syria but kept open the possibility of military action against the Assad regime.
A strengthening dollar overseas also kept the rupee under pressure amid demand from importers. Goldman Sachs followed JP Morgan, HSBC and Nomura in cutting India's economic growth forecast and also said it expects the rupee to touch 72 against the dollar in the next six months.
The local currency opened higher at 61.20 a dollar from the previous close of 61.30 at the Interbank Foreign Exchange Market.
A weak dollar overseas failed to restrict the rupee's decline, a forex dealer said.
Assume that the rupee will trend lower over the next 10 years as India increases overseas sovereign exposures, and your long-term asset allocation should be geared to deal with this trend, suggests Devangshu Datta
The rupee had lost 10 paise to close at 21-month low of 64.26 against the greenback in Tuesday's trade.
The RBI fixed the reference rate for the dollar at 64.1505 and for the euro at 72.2720.
The rupee hit a near 10-month high as an alliance led by pro-reform and business friendly Hindu nationalist Narendra was on course for an absolute majority.
The rupee on Tuesday weakened by 15 paise to close at 63.30 against the US currency
Investors are trying to push ahead with dollar purchases, emboldened by improving market sentiments
Rupee was impacted by renewed dollar demand from banks and importers amid sharp falls in equity market
Snapping its two-day gains, the rupee on Monday declined by 48 paise to settle at nearly four-week low of 62.17 against the US currency.
Weakness in the dollar against some currencies supported the rupee.
The Indian rupee on Tuesday ended marginally higher against the American currency at 61.41 amid volatile trading on the back of a higher dollar overseas.
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.
The dollar's weakness against rivals overseas supported the rupee.
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Some analysts believe that markets are expected to remain unclear and would have to wait until tomorrow's US non-farm payrolls data.
The domestic currency has already dropped 44 paise, or 0.67 per cent, in the previous two sessions.
Increased demand for the dollar from importers affected the value of the rupee
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.
The rupee has dropped by 21 paise or 0.32 per cent in the last two sessions.
Forex dealers said dollar's weakness against other currencies overseas supported the rupee.
The RBI stipulated on Thursday that foreign institutional investors would require a mandate from participatory note holders to hedge on their behalf.
Forex dealers said besides the dollar's gains against the euro overseas, increased demand from importers for the US currency and a lower opening in the domestic equity market also put pressure on the rupee.
Petrol price has been hiked by Rs 1.82 a litre, excluding taxes, with effect from midnight tonight.
However, FII outflows of Rs 545 crore (Rs 5.45 billion) capped the gains in the rupee, which had slumped by 126 paise in past two days.
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 local currency had lost 119 paise in the past five sessions on rising worries over current account gap and fears that withdrawal of US stimulus will hit inflows from overseas.
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 dropped by 60 paise or 0.89 per cent in previous three trading days.
Continuing its range-bound movement for the fourth session, the rupee today closed up by two paise at 59.25 ahead of industrial output and retail inflation data.
Extending losses for the second straight day, the rupee declined by 11 paise to close at more than 3-week low of 66.93 against the US dollar.
The rupee continued to rule firm against the dollar for the second consecutive day.
The rupee snapped its two-day winning run against the dollar.
Weakness of the dollar in the overseas market also boosted the rupee, a forex dealer said.
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