The rupee pared initial gains to weaken by 3 paise to 67.07 against the dollar in late morning deals on fresh bouts of dollar selling by banks and exporters.
The rupee opened flat at 67.04 per dollar from yesterday's closing level at the Inter-bank Foreign Exchange (Forex) market.
The domestic unit hovered in a range of 67.08 and 66.97 during the morning deals before quoting at 67.07 per dollar at 1030 hrs.
The dollar index was trading down 0.33 per cent at 96.34 against a basket of six currencies in early trade.
Overseas, the yen firmed in jumpy market conditions in Asia today, spiking to a 2 1/2-week high against the dollar as investors braced for the possibility that the Bank of Japan's expected easing steps will disappoint market participants hoping for more radical measures.
Oil prices today remained around April lows at the Asian trade as slowing economic growth threatened to worsen ongoing oversupply of crude and refined products.
Meanwhile, the benchmark BSE Sensex was trading down by 55.98 points or 0.23 per cent to 28,142.64 at 1030 hrs.
The BSE Sensex nosedived 465.28 points to end at
27,827.53, while broder Nifty plunged 153.90 points to 8,591.25.
In the meantime, foreign portfolio investors (FPIs) bought shares worth a net Rs 3,413.37 crore today, as per provisional data from exchanges.
In the forward market, premium for dollar declined due to fresh receiving by exporters.
The benchmark six-month premium for February declined to 158-160 paise from 160-162 paise, while the forward August 2017 contract edged higher at 344-346 paise as compared to 342-344 paise earlier.
Crude prices rebounded sharply after oil nations grouping OPEC surprised the market by announcing cut in production from November.
