Rupee slipped from initial gains and was trading down by 11 paise at 66.57 against the US currency in late morning trade on bouts of dollar demand from banks and importers.
The rupee resumed marginally higher by 4 paise at 66.42 as against yesterday's level of 66.46 per dollar at the Interbank Foreign Exchange (Forex) market.
It hovered in a range of 66.37 to 66.5750 during the morning deals before quoting 66.57 at 1030 hrs.
The dollar index was up 0.05 per cent at 94.66 as against a basket of six currencies in the early trade.
In Asian trade, the dollar hovered near a 17-month low against yen after taking a fresh knock overnight on comments by Japan's prime minister which suggested the authorities were cautious towards arresting the yen's appreciation.
Oil prices jumped in early trade, supported by growing expectations that exporters will agree to freeze their output amid global oversupply, although Iran's plans to boost production are seen as capping bigger gains.
Meanwhile, the benchmark BSE Sensex was trading up 14.83 points or 0.06 per cent at 24,898.42 at 1030 hrs.
Meanwhile, crude prices dipped in Asia today as traders
await a closely watched US jobs report that could provide clues on the health of the world's biggest economy and the direction of interest rates.
Pramit Brahmbhatt of Veracity Financial Services said, "To start with the rupee opened marginally lower by 2 paise to 66.57/USD compared to previous close of 66.55/USD. The rupee continued to trade lower and took cues from domestic equity market. Our benchmark index Nifty traded with negative bias and closed with marginal loss of 3 points. Thus to end the day, the rupee closed on flat note at 66.54/USD."
In forward market, premium for dollar dropped further in view of continued receivings from exporters.
The benchmark six-month premium for October moved down further to 202-204 paise from 207.5-208.5 yesterday and far forward April 2017 contract also fell further to 399-401 paise from 403.5-404 paise.
Meanwhile, the benchmark Sensex ended lower by 33.71 points or 0.13 per cent to 25,228.50.
