Some caution ahead of the GDP growth data and buoyant dollar overseas predominantly impacted trading sentiments.
Sluggish local equity markets after five-day rally also weighed on trade, though smooth supply of dollars due to persistent capital inflows into equities and debts largely cushioned the fall.
At the Interbank Foreign Exchange market, the domestic currency opened marginally higher at 67.15 as against its overnight closing value of 67.16 and strengthened further to touch intra-day high of 67.1075 tracking firm opening in the domestic market.
However, rupee made some recovery towards the fag-end session and closed at 67.26, revealing a loss of 10 paise, or 0.15 per cent. Yesterday, the rupee had lost 13 paise against the dollar.
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Meanwhile, the RBI fixed the reference rate for the dollar at 67.2030 and euro at 74.7902.
In cross-currency trades, the rupee fell back against the pound sterling and ended at 98.46 from 98.12 and declined against the euro to finish at 75.10 compared to 74.82 earlier.
third straight session led by gains in banking and capital goods stocks with the flagship Sensex rallying 109.16 points to end at 28,452.17, while the Nifty rose 41.85 points to 8,786.20.
In the forward market, premium for dollar decline owing to sustained receipts by exporters.
The benchmark six-month premium for January moved down to 161.5-163.5 paise from 163-165 paise and the forward July 2017 contract also fell to 352-354 paise from 355-357 paise yesterday.
Crude prices dropped to near two-week low due to supply overhang ahead of the latest US weekly oil stockpiles data release later in the day amid fading expectations of production curb from OPEC at their September meet.