However, it later staged a recovery after the US Fed kept interest rates unchanged but indicated a hike next month.
Forex traders said the rupee's rise was supported by dollar-selling by exporters and banks, and the greenback's weakness against some currencies overseas.
It climbed to a high of 72.45, driven by dollar selling by exporters, but ceded some ground to finally end at 72.50, up 50 paise over its last close.
The rupee had rebounded by 12 paise to end at 73 per US dollar Tuesday. In the last two trading sessions, the rupee has gained 62 paise.
The forex market was closed on Wednesday and Thursday on account of 'Diwali' and 'Diwali Balipratipada' respectively.
Meanwhile, foreign institutional investors (FIIs), which had been selling on the Indian bourses, made fresh purchases worth Rs 31.02 crore Wednesday, as per provisional data.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 72.7347 and for rupee/euro at 82.5195. The reference rate for rupee/British pound was fixed at 94.8737 and for rupee/100 Japanese yen at 63.84.
Meanwhile, domestic benchmark indices ended on a negative note after a choppy session Friday.
The 30-share Sensex fell 79.13 points, or 0.22 per cent, to close at 35,158.55, while the broader NSE Nifty slipped 13.20 points, or 0.12 per cent, to 10,585.20.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)