The Indian rupee dipped 3 paise to close at 71.04 against the US dollar on Wednesday amid rising demand for the greenback vis-a-vis other currencies overseas, even as crude oil prices eased.
Forex traders said a weak trend in domestic equities, political unrest in the US and unabated foreign fund outflows also weighed on the local unit.
At the interbank foreign exchange market, the rupee opened at 71.10, then lost ground and fell to an intra-day low of 71.14 against the American currency.
However, it recouped some losses to finish at 71.04 against the US dollar, down 3 paise over its previous close.
Safe-haven assets like US Treasury bonds and the yen rallied after top US Democrat Nancy Pelosi on Tuesday announced the opening of formal impeachment inquiry into President Donald Trump.
"Indian rupee is flat as there are no major triggers in the market. The political unrest in the US, Middle-East tensions and no update over US-China trade deal has been keeping rupee under pressure," said Rahul Gupta, Currency Research Head, Emkay Global Financial Services Limited.
Gupta further noted that "the only trigger is RBI policy, so ahead of that we expect USD/INR spot to trade in 70.70-71.50."
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