Bucking a strong trend in share market, the Indian rupee on Monday gave up all its initial gains and slipped 18 paise to close at 61.94 against the Greenback on rising dollar demand from importers.
Dollar demand from oil refiners for meeting their month-end requirements pushing down the rupee to log its first drop in three sessions, forex traders said.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced better at 61.7450 a dollar from last weekend's close of 61.76. It then rose to day's high of 61.65 on rise in local equities and a weak dollar overseas.
However, it met with strong resistance and dropped to a low of 61.9675 on fresh heavy dollar demand from importers before settling at 61.94, a fall of 18 paise or 0.29%.
In the previous two sessions, the rupee had risen by 20 paise, or 0.32%, against the US dollar. The Indian benchmark S&P BSE Sensex on Monday flared up by 164.91 points, or 0.58%, to close at yet another peak.
FPIs/FIIs picked up shares worth $43.57 million last Friday, as per Sebi data. A gauge of six major global rivals, the dollar index was down by 0.15%.
Pramit Brahmbhatt, CEO, Veracity Group, said: "Rupee traded volatile today. In the first half of the day, it appreciated taking cues from strong local equities which closed all time high. However, in the second half rupee lost its way and depreciated by over quarter per cent on good demand for the dollar from state-run banks."
The trading range for the spot USD/INR pair is expected to be within 61.50 to 62.50, he added.