The rupee pared early gains by slipping 2 paise to 68.12 against the American currency in late morning deals on bouts of dollar demand from importers and banks amid lower equities.
The rupee opened higher at 68.06 as against yesterday's closing level of 68.10 per dollar at the Interbank Foreign Exchange (Forex) Market.
It gained further to 68.05 before slipping to 68.13 per dollar during morning hours. It was quoting at 68.12 at 1030 hours.
The domestic unit hovered between 68.05 and 68.13 per dollar during morning deals.
The dollar index was trading down by 0.38 per cent at 101.19 against a basket of six currencies.
Overseas, the US dollar saw a mixed trend against basket of currencies in early Asian trade as the British pound flirted with a three-month low, hit by fears that Prime Minister Theresa May's speech later in the day will set Britain on course to lose access to the lucrative European Union single market.
Meanwhile, the Indian benchmark Sensex was quoting lower by 23.27 points or 0.09 per cent to 27,264.90 at 1050hrs.
Meanwhile, crude futures made moderate gains today as
larger-than-expected growth in US crude stocks and production was overshadowed by news that the Organisation of the Petroleum Exporting Countries could consider extending its production cuts for more months.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD 53.43 a barrel, up USD 0.07 in the Globex electronic session.
April Brent crude on London's ICE Futures exchange rose USD 0.10 to USD 55.75 a barrel.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 215.69 crore yesterday, provisional data showed.
Meanwhile, the benchmark Sensex gained by 167.48 points or 0.59 per cent to close at 28,468.75 today.
In forward market today, premium for dollar firmed up on fresh paying pressure from corporates.
The benchmark six-month premium payable in July rose to 144-146 paise from its previous level of 143-145 and far forward January 2018 contract also moved up to 296-298 paise from Thursday's closing level of 294-296.
The RBI fixed the reference rate for the dollar at 67.0467 and for the euro at 71.5053.
In cross-currency trades, the rupee finished higher against the pound sterling at 83.15/17 from 83.84/86 but euro turned lower against the Euro to settle at 71.33/35 from 71.28/30.
The domestic currency dropped against the Japanese Yen to 59.34/36 per yen from 58.96/98 yesterday.
