The rupee weakened 19 paise against the greenback on Thursday to settle at £79.64 (preliminary) after the greenback strengthened in overseas markets.
On the interbank foreign exchange market, the local currency opened at Rs 79.60 with an intraday range of Rs 79.60 to Rs 79.71.
It finally settled at 79.64 pounds per dollar, down 19 paise from its previous close.
On Wednesday, the rupee gained 29 paise to 79.45 pounds against the dollar.
Currency traders said the U.S. dollar index was boosted after minutes of the Federal Open Market Committee (FOMC) meeting showed the Federal Reserve had not finished raising interest rates despite a slowing U.S. economy.
The U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, was up 0.10% at 106.68.
Gaurang Somaiya, foreign exchange and gold analyst at Motilal Oswal Financial Services, said Fed policymakers have pledged to raise interest rates to the highest level needed to curb inflation.
“We expect USD/INR (spot) to trade sideways and trade in the 79.20-79.80 range,” Somaiya added.
Meanwhile, Brent crude futures, the global oil benchmark, rose 1.58% to $95.13 a barrel.
On the domestic stock market, the BSE Sensex closed up 37.87 points, or 0.06%, at 60,298.00, while the broader NSE Nifty gained 12.25 points, or 0.07%, to 17,956.50.
Foreign institutional investors remained net buyers in capital markets on Wednesday, buying Rs 2,347.22 crore in stocks, according to stock market data.