Paring its early gains, the rupee finished lower by 4 paise at 61.55 against the US dollar on Thursday on renewed dollar demand from banks and importers.
The rupee resumed higher at 61.46 per dollar as against last closing level of 61.51 at the Interbank Foreign Exchange (Forex) Market.
However, it declined afterwards to 61.5950 on fag-end dollar demand from banks and importers before concluding at 61.55 per dollar, showing a loss of 4 paise or 0.07%.
The rupee hovered in a range of 61.46 and 61.5950 per dollar during the day.
In the global market, the dollar weakened against the euro after New York Federal Reserve president William C Dudley urged investors to be patient on the timing of a US interest-rate increase. The dollar index was down by 0.18% against its major global rivals.
Meanwhile, the benchmark BSE Sensex ended lower by 68.26 points or 0.24% to 27,940.64.
In the forward market, premium ended mixed on alternate bouts of receipts and payments transactions.
The benchmark six-month premium payable in April eased to 217-219 paise from 218-220 paise on Wednesday.
However, forward contracts maturing in October, 2015 gained to 442-444 paise from 434.5-436.5 paise previously.
The Reserve Bank of India fixed the reference rate for the US dollar at 61.5560 and for the euro at 76.6126.
The rupee strengthened against the pound to 97.04 from the previous closing level of 97.55 and recovered to 76.72 per euro from 76.74 per euro previously.
It also rebounded to 53.23 per 100 Japanese yen from Wednesday's level of 53.41.