Snapping 3-day winning spree, the rupee declined marginally by 3 paise to 66.03 per dollar on fresh demand for the US currency from banks and importers.
The rupee opened higher at 65.95 per dollar as against Monday’s closing level of 66.00 at the Interbank Foreign Exchange (Forex) market and firmed up further to 65.90 on initial dollar selling by exporters.
However, it washed out initial gains and dropped to 66.10 on fag-end dollar demand from banks and importers before settling at 66.03, showing a mere loss of three paise or 0.05%.
It had gained by 44 paise or 0.66% in the previous three days.
It hovered in the range of 65.90 to 66.10 per dollar during the day.
The dollar index was trading up by 0.10% against a basket of six currencies in the late afternoon trade.
In overseas markets, oil prices extended gains in early Asia trade but the uptick was capped as investors waited for data on US crude stockpiles expected to further underscore a global supply glut.
The dollar hit a fresh seven-month high against the euro and a one-week high against the yen during Asia trade on Tuesday, indicating investor expectations for an increase US interest rates next month that would bring added strength to the greenback remain intact.
Meanwhile, the Indian benchmark Sensex rose by 104.37 points or 0.41% to close at 25,864.47.