Snapping its two-day rising trend, the rupee on Thursday slipped marginally by two paise at 66.43 against the US dollar on good demand for the greenback from banks and importers.
The domestic unit resumed lower at 66.72 as against yesterday's closing level of 66.41 at the Interbank Foreign Exchange (Forex) market and fell further to 66.76 on initial dollar demand from banks and importers.
However, it recovered afterwards to 66.42 on selling of dollars by exporters in view of recovery in the equity market, but still ended down by 2 paise, or 0.03%, at 66.43.
The domestic currency had gained 41 paise, or 0.62%, in last two trading sessions. It hovered in a range of 66.42 to 66.76 during the day.
The dollar index was quoted higher by 0.15% against a basket of six currencies in afternoon trade.
Crude oil prices fell in early Asian trade as weak Japanese and Chinese economic data fuelled concerns that low levels of investment could further erode already slow growth in Asia.
In New York, the dollar trimmed early gains against the yen and the euro on Wednesday, but remained higher against both even as falling Treasury yields dulled the dollar's luster.
Meanwhile, the benchmark BSE Sensex ended lower by 97.41 points, or 0.38%, at 25,622.17.