The rupee recovered from its initial losses to trade higher by 9 paise at 67.77 against the greenback in late morning deals following sustained bouts of dollar-selling from banks and exporters despite lower equities.
The domestic unit witnessed volatility and was trading between a high of 67.60 and low of 67.90 during morning deals, it was trading at 67.77 per dollar at 1030 hrs.
Rupee remained under pressure on sustained foreign funds outflows, increased month-end dollar demand and surging dollar amid Italian political crises.
"RBI's selling through banks lifted the rupee sentiment," a dealer said.
Meanwhile, the US dollar climbed against against basket currencies in early Asian trade, while the euro was buried near multi-month lows against major rivals as Italy's political crisis deepened.
The 30-share BSE Sensex trading lower by 184.09 points, or 0.53 per cent, at 34,765.15 at 1100 hrs.
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