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In line with equity markets, the rupee fell by three paise to 61.76 against the American currency in late morning trade on fresh dollar demand from banks and importers.
The rupee resumed higher at 61.70 as against 61.73 at the Interbank Foreign Exchange (Forex) and firmed up further to 61.67 on initial selling of dollars by banks in view of firm trend in equity markets.
However, it washed out initial gains and dropped to 61.80 on fresh dollar demand from banks before quoting at 61.76 at 1100 hours.
The local currency hovered in a range of 61.67-61.80 per dollar during late morning trade.
In New York market, the euro recovered against the dollar yesterday as investors shook off some worries about Greece.
Meanwhile, the benchmark BSE Sensex dropped 82.08 points, or 0.28%, to 28,768.89 at 1100 hours after touching a high of 28,922.85 in early trade.
