Also, the sudden drop in Chinese yuan led to increased volatility in emerging market currencies, including the rupee
FPIs have turned negative and the budgetary announcement on tax surcharge has been a factor that has restricted their activity
The domestic currency on Tuesday furthered its loss by another 28 paise to close at a new six-month low of 71.71 as economic uncertainties continued to weigh.
Meanwhile, higher crude oil prices also had its impact on rupee's trading pattern
The domestic unit on Tuesday pared most of its initial losses and closed with a marginal 2 paise drop at 68.94 amid strengthening of the dollar against major currencies.
The domestic unit on Wednesday declined by 7 paise to close at 68.58, pressured by persistent foreign fund outflows and firming crude oil prices.
The domestic unit on Monday declined by 24 paise to close at 68.66, cutting short its three winning run due to a massive selloff in equities.
The domestic unit on Monday recovered the lost ground and finally settled 23 paise higher at 69.35 amid the weakening of the greenback against major currencies.
Forex dealers say the dollar gained strength after the US and China agreed to put off imposition of higher tariffs from January 1 while entering a 90-day period of talks to bring an end to their trade
The domestic unit on Tuesday surged by 21 paise to close at 69.70 as easing crude prices and a weak dollar ahead of the US central bank's meeting helped the currency snap its three-day losing streak.
The domestic unit on Thursday surged 24 paise to close at a one-week high of Rs 69.44 on the back of a rally in equities.
Market players say the Dollar index is the new fear indicator for the market
The domestic unit on Wednesday lost 29 paise to close at 71.77 as fears of an impending global recession prompted investors to stick to safe-haven assets.
This is the highest closing for the home currency since September 13, when it had closed at 64.00
A breathtaking rally in domestic equities too weighed on the forex trading front
Yesterday, the rupee had gained 8 paise to end at a fresh one-week high of 64.37 a dollar
After a sluggish start to 2018, the US dollar staged a rebound against other major currencies in quiet trade
The benchmark Sensex zoomed over 301 points to close at 33,250.30 while the Nifty jumped 99 points to 10,265.65
The RBI, meanwhile, fixed the reference rate for the dollar at 64.3799 and for the euro at 76.3739
The rupee opened on a strong note and soared 35 paise to 69.79 a dollar against the previous close of 70.14