The rupee fell by 7 paise against the US dollar to 65.04 on sudden bouts of month-end dollar demand from importers and banks amid weakness in local equities.
The dollar's recovery on hopes that negotiations between the United States and China would led to a compromise also weighed on the domestic unit.
The rupee opened higher at 64.90 per dollar against yesterday's close of 64.97 at the interbank foreign exchange here.
The domestic unit witnessed volatility and hovered between highs of 64.88 and and lows of 65.09. It was trading at 65.04 at 1445 hrs.
Investors turned cautious ahead of the long weekend, said forex dealers.
Markets will remain closed on Thursday and Friday on account of Mahavir Jayanti and Good Friday, respectively.
Meanwhile, the 30-share BSE Sensex trading lower by 214.41 points or 0.65 per cent at 32,959.98.
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