The rupee weakened by 24 paise to end at 74.55 (provisional) against the US dollar on Tuesday as firmer American currency and rising crude oil prices weighed on investor sentiment.
At the interbank foreign exchange market, the rupee opened at 74.28 per dollar. It hovered in the range of 74.25 to 74.62 during the day before ending at 74.55 against the greenback.
On Monday, the rupee had settled at 74.31 against the US dollar.
"The Indian rupee pared gains along with equities amid higher yields following an overnight surge in crude oil prices after OPEC+ meeting ended without a deal to bring back more halted output next month," said Dilip Parmar, Research Analyst, HDFC Securities.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.18 percent to 92.38.
"With the dollar index in consolidation mode ahead of tomorrow evening's Federal Open Market Committee (FOMC) minutes and emerging market currencies taking cues from the commodity prices and in particular crude oil and on the performance of riskier assets," Parmar said.
Spot USDINR is expected to consolidate in the broad range of 74 to 74.80 in the coming days, Parmar noted.
On the domestic equity market front, the BSE Sensex ended 18.82 points or 0.04 percent lower at 52,861.18, while the broader NSE Nifty fell 16.10 points or 0.1 percent to 15,818.25.
Brent crude futures, the global oil benchmark, advanced 0.19 percent to USD 77.31 per barrel.
Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 338.43 crore, as per exchange data.