Mumbai: Snapping its two-day rising trend, the rupee on Wednesday lost four paise to end at 66.96 against the US dollar on fresh demand for the American currency from banks and importers.
Strong foreign capital outflows also affected the rupee value against the dollar. Foreign portfolio investors (FPIs) sold shares worth a net Rs 1,435.76 crore on Tuesday, as per provisional data.
Persistent rise in the stock market failed to restrict the rupee's loss against the dollar, a forex dealer said.
The rupee resumed lower at 66.95 as against the Monday's closing level of 66.92 at the Interbank Foreign Exchange market.
The domestic unit hovered between 66.87 and 67.01 per dollar before ending at 66.96, showing a loss of four paise or 0.06 per cent.
The dollar had gained by 15 paise, or 0.22 per cent, in the previous two trading days.
The dollar index was trading higher by 0.21 per cent against a basket of six currencies in the late afternoon trade.
Overseas, the dollar eased against the yen and other rival currencies in range-bound trade on Wednesday, with upside for the US currency stymied as investors cashed in on recent gains.
Earlier, the dollar opened lower as investors awaited the minutes of the Federal Reserve's latest meeting for clues as to the pace of interest rate hikes, while the euro nursed losses and remained pressured by European political woes.
Meanwhile, US oil prices stayed at a 19-month high on Wednesday after OPEC leaders affirmed that the supply cut effort by heavyweights producers was making headway.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $54.52 a barrel in the Globex electronic session. US crude prices closed up 55 cents at $54.33, the best closing level in more than a year.
Meanwhile, the benchmark Sensex gained by another 103.12 points, or 0.36 per cent, to close at 28,864.71 on Wednesday.
In forward market, premium for dollar eased on mild receivings from exporters.
The benchmark six-month premium payable in July edged down to 142-144 paise from its previous level of 145-147 paise and far forward January 2018 contract also declined to 297-299 paise from Monday's closing level of 298-300.
The RBI fixed the reference rate for the dollar at 66.9644 and for the euro at 70.5403.
In cross-currency trades, the rupee finished higher against the pound sterling at 83.30/32 from 83.46/48 and euro also rose against the Euro to settle at 70.29/31 from 71.10/12.
The domestic currency eased against the Japanese Yen to 59.24/26 per 100 yen from 59.17/19 previously.
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