The rupee pared initial gains and settled for the day 17 paise lower at 73.46 (provisional) against the US dollar on Tuesday.
At the interbank forex market, the domestic unit opened at 73.17 tracking positive domestic equities and weak greenback, but soon pared the gains and finally closed at 73.46, down 17 paise over its previous close of 73.29.
During the session, the local unit witnessed an intra-day high of 73.15 and a low of 73.51 against the American currency.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02 per cent lower at 93.49.
On the domestic equity market front, the BSE benchmark Sensex was trading 369.81 points higher at 39,343.51, and the broader NSE Nifty rose 96.65 points to 11,600.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 236.71 crore on Monday, according to exchange data.
Brent crude futures, the global oil benchmark, rose 0.51 per cent to USD 41.50 per barrel.