Forex traders said steady crude oil prices and foreign fund inflows supported the rupee, while factors like strong dollar, muted domestic equities and rising COVID-19 cases dragged the local unit down.
The rupee opened on a positive note at 74.88 at the interbank forex market, but soon lost ground and touched 74.98 against US dollar, down 5 paise over its last close.
It had settled at 74.93 against the US dollar on Tuesday.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.07 per cent to 96.95.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 23.97 points lower at 36,650.55 and broader NSE Nifty fell 5.10 points to 10,794.55.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 829.90 crore on Tuesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.35 per cent to USD 42.93 per barrel.
Meanwhile, the number of cases around the world linked to COVID-19 has crossed 1.17 crore and the death toll has topped 5.43 lakh.
In India, the death toll due the disease rose to 20,642 and the number of infections stood at 7,42,417, according to the health ministry. DRR DRR ANS ANS