Breaking a two-day upmove, the rupee on Friday ended marginally lower by 3 paise at 66.88 against the dollar because of stray demand coming in from importers and banks for the American currency.
Maintaining its strong upbeat trend, the rupee resumed higher at 66.81 from the overnight close of 66.85 on sustained dollar unwinding. But it soon fell to hit a low of 66.99 briefly before regaining momentum, which took the currency to an intra-day high of 66.77.
The recovery was short-lived as intense volatility pulled back the local unit to end the day lower at 66.88, a loss of 3 paise, or 0.04 per cent.
Despite a strong start, the Indian unit succumbed to fresh selling triggered by a sharp breakout in the US dollar on easing concerns over US President Donald Trump's fiscal stimulus promises. Asian currencies also came under renewed pressure.
The greenback staged a smart rebound after Trump promised tax reforms within weeks. Market sentiment also turned cautious ahead of key macro data in the day -- industrial production (IIP) for December. Expectations of robust capital inflows, however, capped losses in the rupee, a dealer said.
The US dollar index was trading higher at 100.80 in the late afternoon session.