Despite a better start, the home currency succumbed to fag-end dollar pressure and eventually reversed its direction.
Though, a smart rebound in local equities and smooth supply of dollars into equities and debts predominantly weighed on trading sentiments, supporting the rupee from any major deviation.
With the US Federal Reserve's June interest rate decision out of the way, global unwinding of dollar longs also weighed The rupee opened a tad higher at 64.42 per dollar from weekend's closing level of 64.43 at the Interbank Foreign Exchange (Forex) market.
The RBI, meanwhile, fixed the reference rate for the dollar at 64.3788 and for the euro at 72.1043.On forex market.
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Domestic equities staged a spectacular rebound after two-day consolidation mood following heavy buying in banking heavyweights along with metal and FMCG counters even as strong surge across overseas markets bolstered trading sentiment.
The flagship Sensex shot up over 255 points to end at a new peak of 31,311.57, while broader Nifty jumped 69.50 points at 9,657.55.
Foreign investors pumped in a staggering USD 3.55 billion in the Indian capital market this month so far due to finalisation of GST rates for bulk of the items and forecast of a normal monsoon.
On the global front, the dollar pared post-FOMC gains and traded marginally weak against major global currencies as release of soft US housing data and consumer confidence cast doubts on whether the Fed will continue its rate hike at its September meeting.
In cross-currency trades, the rupee fell back after a brief recovery against the pound sterling to settle at 82.47 from 82.28 per pound and retreated against the euro to finish at 72.19 from 71.99 earlier.
The domestic unit also drifted against the Japanese yen to close at 57.98 per 100 yens from 57.85 last Friday.
In the meantime, after touching a life-time high, the country's forex reserves marginally declined by USD 11.5 million to USD 381.156 billion in the week to June 9 due to fall in foreign currency assets, the Reserve Bank said.
The benchmark six-month premium payable in November eased to 133.50-135 paise from 134-136 paise and the far forward May 2018 contract also edged lower to 279.50-280.50 paise from 280-282 paise.
On the International commodity front, crude oil prices remained under pressure and traded below the 2017 low levels as a relentless expansion in US drilling weighed on prices.
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