The Indian rupee today turned weak after a strong start and depreciated by nine paise against the US currency on some dollar demand from importers amid lacklustre trading in equity markets.
In quiet trade at the Interbank Foreign Exchange forex market, the domestic currency resumed firm at 51.33/34 a $ against its last close of 51.51/52 a $ but later dropped sharply to 51.60/62 a $ in late morning deals.
Dealers said the rupee touched the 51.60-level in late morning trade on a sudden dollar buying spree from banks.
Attributing initial rupee surge to expectations of steady capital inflows, they said oil importers are believed to be buying dollars as global crude oil fell below $45 a barrel in Asian trade this morning.
Meanwhile, the benchmark Sensex fell by over 45 points to 8,709.94 points at 1100 hrs, after opening strong by 71 points today.
Updated at 1020 hrs
The Indian rupee today appreciated by 16 paise against the US currency in early trade on hopes of increased capital inflows from foreign funds boosted by last week's rally in the stock markets.
At the Interbank Foreign Exchange (Forex) market, the domestic unit was quoted higher at 51.35 a $, a rise of 16 paise over the previous close of 51.51/52.
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Forex dealers said expectations of pick-up in capital inflow from foreign funds into the domestic stock markets, which may maintained its upward march today, mainly supported the rupee.
Other Asian currencies gaining against the greenback also supported the rupee, they added.
The Indian unit on Friday had ended 35 paise higher at 51.51/52 against the $ and the the stock markets surged over 5 per cent during the past week.
In early trade today, most of the Asian bourses were up by almost 2.4 per cent.