A rally in domestic equities and a subdued dollar overseas failed to lift the forex sentiment.
The release of latest consumer price index-based inflation data for May and the IIP data for April largely kept the forex market sentiment volatile.
Also, some caution ahead of the highly-anticipated two-day US Federal Reserve meet amid expectations of interest rate hike weighed on the trading front.
"Markets are awaiting the outcome of the monetary policy meeting from the three central banks (FOMC, ECB and BoJ). Fed is expected to raise its interest rates tomorrow while ECB likely to debate to decide the timeline of its current QE (quantitative easing)programme," Anand James, Chief Market Strategist at Geojit Financial Services said.
Bond markets, however, witnessed a mix trend and the 10-year benchmark bond yield finished higher at 7.97 per cent.
The rupee resumed lower at 67.48 from overnight close of 67.42 at the interbank foreign exchange (forex) market on bouts of dollar demand.
It lost further ground to hit a low of 67.52 in mid-morning deals before a trend reversal.
After touching a fresh intra-day high of 67.35 briefly during the fag-end trade, the local unit once again turned volatile and reversed all its gains to end at 67.49, showing a loss of 7 paise, or 0.10 per cent.
Yesterday, the rupee had ended 8 paise higher at 67.42 against the US currency, cutting short its two-day decline.
The RBI, meanwhile, fixed the reference rate for the dollar at 67.4571 and for the euro at 79.3498.
Globally, the dollar hovered near a three-week high against the yen. The dollar index, which measures the greenback's value against a basket of six major currencies, was up at 93.63.
In the cross currency trade, the rupee also retreated against the pound sterling to settle at 90.31 per pound from 90.03 and remained weak against the euro to close at 79.47 from 79.45 earlier.
The home unit bounced back against the Japanese yen to finish at 61.22 per 100 yens as compared to 61.30.
Retail inflation inched up to 4.87 in May on increase in prices of certain items in the food basket, official data released after market hours showed.
In forward market today, premium for dollar looked up due to mild paying pressure from corporates.
The benchmark six-month forward premium payable in October inched higher to 109.25-111.25 paise from 109-111 paise and the far-forward April 2019 contract edged up to 253-255 paise from 252-254 paise on Monday.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)