The rupee pared initial gains to close 6 paise lower at 75.61 (provisional) against the US dollar on Tuesday tracking muted domestic equities and strengthening American currency in the overseas market.
Forex traders said persistent foreign fund flows and the revival of business activity supported the rupee, but strong US dollar weighed on the domestic unit.
The rupee opened at 75.53 against the US dollar, but pared the gains to settle at 75.61 against the US dollar, down 6 paise over its previous close.
It had settled at 75.55 against the greenback on Monday.
During the four-hour trading session, the domestic unit saw an intra-day high of 75.43 and a low of 75.61.
Meanwhile, the 30-share BSE benchmark Sensex was trading 164.73 points lower at 34,205.85 and broader NSE Nifty fell 47.30 points to 10,120.15.
Foreign institutional investors were net buyers in the capital market as they bought shares worth Rs 813.27 crore on Monday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 1.27 per cent to USD 40.28 per barrel.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.42 per cent to 97.02.