The rupee surrendered its early gains on Monday and softened by two paise to end at 61.17 against the greenback on late dollar demand from importers amid fresh capital outflows, snapping a two-session gaining trend.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced strong at 61.02, which was also the day's high, from last weekend's close of 61.15.
Later, it moved in a range of 61.02 and 61.27 before settling at 61.17, a fall of two paise or 0.03 per cent.
In the previous two sessions, it fell by 34 paise.
The Indian benchmark S&P BSE Sensex on Monday bounced back by 190.10 points, or 0.75 per cent. FIIs pulled out Rs 503.74 crore last Friday, as per provisional data with bourses.
Importers, mainly oil refiners, bought dollars as oil prices rose in Asia.
The dollar index was down by 0.17 per cent against a basket of six major global rivals on geopolitical concerns.
Pramit Brahmbhatt, Veracity Group CEO said,"To start the day rupee opened positive taking cues from strong local equity markets. However, towards the end rupee lost his gains and ended near Friday's close."
The trading range for the Spot USD/INR pair is expected to be within 60.80 to 61.60, he added.
"On the domestic front, we have the inflation and the industrial production figures, scheduled for release tomorrow, which might impact the domestic currency," said Abhishek Goenka, Founder & CEO, India Forex Advisors.