Rupee trims initial losses, still down 4 paise against dollar

In line with equity market, the rupee trimmed its initial losses against the American currency, but was still trading lower by 4 paise to 66.71 per dollar on mild dollar demand from banks and importers despite lower greenback in the overseas market.

The rupee resumed lower at 66.79 per dollar as against the Tuesday's closing level of 66.67 per dollar at the Interbank Foreign Exchange Market and dropped further to 66.84 per dollar on heavy dollar demand on concerns that future equity inflows into India would be hit in the aftermath of amendments to the bilateral India-Mauritius tax treaty.

However, it trimmed its initial loss and recovered to 66.6875 per dollar before quoting at 66.71 per dollar, still showing a loss of four paise following recovery in the equity market.

The domestic currency hovered in a range of 66.6875 per dollar to 66.84 per dollar during the morning trade.

The dollar was sharply lower against the yen during Asian trade on Wednesday hurt by profit-taking after the greenback's recent strength.

The US currency tumbled to as low as yen 108.60 in the late morning trade in Tokyo, before stabilizing at 108.68 yen.