Mumbai: The Indian rupee Wednesday snapped its two-session uptrend against the American currency, falling 18 paise to close at 62.34 on fresh dollar demand from banks and importers.
The dollar was trading up in global markets on caution ahead of the US Federal Reserve's January policy meeting minutes release.
The rupee resumed lower at 62.20 per dollar as against on Monday's level of 62.16 per dollar at the Interbank Foreign Exchange (Forex) Market. It dropped further to 62.35 before ending at 62.34, a loss of 18 paise or 0.29 percent.
The rupee had gained 15 paise or 0.24 percent in the previous two sessions.
The rupee hovered in a range of 62.19 per dollar and 62.35 per dollar during the day.
"We believe with the overnight risk of Fed meet minutes release due tonight, investors will not want to be on the wrong side of the market when it reopens on Friday. So, volumes remained low on Wednesday ahead tonight FOMC minutes and tomorrow's holiday. Indian currency derivative markets are closed tomorrow for a local holiday," said Admisi Forex India Pvt Ltd, Director, Suresh Nair.
The dollar index was up by 0.09 percent against a basket of its major global rivals.
Asian equities ended higher today as pessimism over the Greek debt situation receded to some extent.
In the New York market, the US dollar were modestly higher against its major rivals in early trade.
Meanwhile, the Indian benchmark Sensex ended higher by 184.38 points, or 0.63 percent, to close at 29,320.26.
Veracity Group, CEO, Pramit Brahmbhatt said: "Indian equities continued to trade strong and closed up by over half percent which tried to support the rupee movement but increased dollar demand from importers forced the rupee to depreciate over a quarter percent."
Meanwhile, the forward premia declined on fresh receipts from exporters.
The benchmark six-month premium payable in July ended lower to 204-206 paise from 209-211 paise on Monday. Forward contracts maturing in January 2016 also dropped to 416-418 paise from 421-423 paise.
The Reserve Bank of India fixed the reference rate for dollar at 62.2450 and for Euro at 71.0091.
The rupee dropped against the pound to 96.15 per pound from 95.60 previously while it firmed up further against the euro to 70.81 paise from 70.95 per euro.
It also rose to 52.29 per 100 yen compared to 52.42 on Monday.
