The rupee today washed out initial gains and ended marginally lower by 2 paise at 64.61 against the American currency in a quiet session after a hectic three-day run.
A renewed dollar demand from importers and local banks predominantly put pressure on the rupee, even as the greenback traded little subdued overseas.
Despite a firm start, the domestic currency showed signs of fatigue and succumbed to late sell-offs, though the undertone remained extremely bullish on the back of abundant capital inflows from foreign investors.
The Indian unit had climbed to a fresh six-week high yesterday buoyed by the positive sentiments in the wake of robust macro-economic indicators.
Sentiment was buoyed by after India jumped to 100th position in the World Bank's 'ease of doing business' ranking following government's strong policy measures to attract investments and revive the economy.
Adding more value, eight core sectors grew to a six-month high of 5.2 per cent in September, helped by a robust performance in coal, natural gas and refinery segments.
Meanwhile, the Federal Reserve bank chairman nomination due later during the US session will be another market moving event which is playing in the minds of investors.
Domestic bourses retreat after scaling fresh highs as retail investors turned cautious and booked profits due to stretched valuations and also tracking lacklustre lead from New York and Asia.
The flagship Sensex retreated from record high to close lower by 27 points at 33,573.22, while Nifty shed 16.70 points to 10,423.80.
On the global front, the greenback weakened across the board after reports that Jay Powell would be President Donald Trump's nominee to serve as the next chair of the Federal Reserve.
Meanwhile, after its latest policy meeting ended Wednesday, the US Federal Reserve held on rates and kept the window open for a December hike.
Global crude oil prices were steady above USD 60-mark a barrel on Thursday.
At the Interbank Foreign Exchange (FOREX) market, the rupee opened stronger at 64.53 against Wednesday's close of 64.59 on sustained dollar selling from local banks and exporters.
It strengthened further to hit a fresh intra-day high of 64.47 in mid-morning deals supported by initial rally in local equities.
However, the home unit soon lost ground to trade in negative territory and touched a low of 64.67 towards the fag end trade before settling at 64.61, showing a nominal loss of 2 paise, or 0.03 per cent.
In the three-day rally, the rupee had appreciated by a whopping 46 paise against the US currency.
The RBI, meanwhile, fixed the reference rate for the dollar at 64.5930 and for the euro at 75.2831.
The dollar index, which measures the greenback's value against a basket of six major currencies, was down at 94.59 in early trade.
In cross-currency trades, the rupee rebounded against the pound sterling to finish at 85.31 from 85.87 per pound and also advanced against the Japanese yen to end at 56.62 per 100 yens as compared to 56.64 yesterday.
The domestic unit, however, fell back against the euro to close at 75.27 from 75.14 earlier.
Elsewhere, the common currency euro is trading little changed against the greenback, after set of manufacturing PMI data surprised on the upside and German unemployment fell to multi-year lows.
Pound sterling, on the other hand turned volatile ahead of BoE rate hike decision as the central bank if expected to hike rates for the first time in a decade.
In forward market today, premium for dollar dropped sharply due to fresh receiving from exporters.
The benchmark six-month premium payable in April declined to 139.50-140.50 paise from 142.75-144.75 paise and the far forward October 2018 contract also drifted to 279-281 paise from 283-285 previously.
On the international energy front, global crude prices traded little changed on Thursday following a slide in US commercial crude inventories despite a rise in production, while OPEC-led supply cut continued to tighten the market.
Brent futures, the international benchmark for oil prices, were at USD 60.52 per barrel in early Asian trade, up 3 cents from their last close.
US West Texas Intermediate (WTI) crude was at USD 54.26 a barrel, down 4 cents from the last close.
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