The rupee came under pressure against the dollar today slipping 11 paise to 65.32 after upbeat economic data bolstered prospects of a US interest rate increase next month and beyond.
A higher interest regime pulls investors looking for more returns away from emerging markets assets that are considered risky.
The American unit strengthened overseas, too.
Forex dealers said increased demand for the US currency from importers and the greenback's gains against other currencies overseas put pressure on the rupee.
Yesterday, the rupee had rebounded 21 paise to close at 65.21 against the US currency, ending its two-day slide on fresh bouts of dollar selling even as trade deficit widened alarmingly to a three-year high.
Meanwhile, the benchmark BSE Sensex went up 163.80 points, or 0.49 per cent, to 32,924.24 in early session today.
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