The unit resumed lower at 67.21 per dollar against last Friday's closing level of 67.08 at the Interbank Foreign Exchange market and dropped further to 67.46 before ending at 67.35, showing a loss of 27 paise or 0.40 per cent.
The rupee had jumped by 164 paise or 2.39 per cent in previous six trading days.
It hovered in a range of 67.20-67.46 per dollar during the day.
The dollar index was up 0.06 per cent against a basket of six currencies in the late afternoon trade.
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The yen was stronger against rival currencies during Asian afternoon trade Today, hitting its one-week high against the dollar, with weakness in Tokyo stocks prompting investors to seek the perceived safety of the Japanese currency.
Pramit Brahmbhatt of Veracity Financial Services said the rupee opened above 67 on a negative note and continued to trade with negative bias throughout the day, thus by strengthening dollar. Our domestic equity market Nifty traded with choppiness and closed with no profit no loss. Thus to end the day, the rupee closed with a loss 27 paise at 67.35/USD.
above USD 40 a barrel, as traders took profits after solid gains over the past three weeks.
US benchmark West Texas Intermediate (WTI) for delivery in April slid 48 cents to USD 37.42 and Brent crude for May fell 57 cents to USD 40.27 a barrel.
In forward market, premium for dollar moved up further on sustained paying pressure from corporates.
The benchmark six-month premium for August firmed up further to 229.5-231.5 paise from the last weekend's level of 225-227 paise and far forward February 2017 contract also moved up further to 435-437 paise from 430-432 paise.
In cross-currency trades, the rupee fell further against the pound sterling to end at 95.70 from the last weekend's level of 94.89 and also dropped further against the euro to close at 74.16 from 73.67.
The domestic unit moved down against the yen to settle at 59.64 per 100 yens from 58.96.