Breaking a five-session downfall, the rupee finished a tad higher against the American currency at 66.83 on mild selling of the dollar.
Weak dollar sentiment largely supported the rupee movement despite impending historic Fed rate hike even as domestic equities slumped to a fresh three-month low.
The domestic unit opened flat with a positive bias at 66.83 per dollar compared to Tuesday’s closing level of 66.84 at the Interbank Foreign Exchange and strengthened further to 66.72 on bouts of dollar selling by exporters.
However, it lost early gaining momentum and retreated sharply to 66.92 in mid-afternoon trade following heavy dollar demand before staging a healthy recovery to end at 66.83 compared to 66.84 yesterday, showing a gain of just 1 paisa, or 0.01 per cent.
On global forex front, the dollar slipped against other major currencies on modest rebound in oil prices, although expectations for a US rate hike this month continued to support the greenback.
Meanwhile, the People’s Bank of China (PBOC) set the mid-point rate for the yuan at its lowest level in more than four years.
The dollar index, which tracks the world’s reserve currency against a basket of its peers, is down 0.30 per cent at 98.12.
The stock market flagship index Sensex plunged over 274.28 points to close at 25,036.05 – its weakest closing since September 7.
Foreign investors continued their selling spree and sold shares worth Rs 518.46 crore yesterday, as per provisional data.
In forward market today, premium for dollar continued witness downward pressure due to sustained receivings from exporters.
The benchmark six-month premium payable in May softened to 197-199 paise from 198-200 paise. However, far forward November 2016 contract ended steady at 404-406 paise.
The RBI fixed the reference rate for the dollar at 66.7500 and for the euro at 72.8910.
The rupee fellback against the pound sterling to settle at 100.69 from overnight level of 100.26 and dropped further against the euro to end at 73.02 compared to 72.56.
It, also fell further against the Japanese currency to end at 54.48 from 54.27 per 100 yen yesterday.