Mumbai: The rupee turned weak and was quoted lower by about seven paise against the US currency at 39.55/56 a dollar in morning trade on Wednesday on heavy dollar demand amid weakness in equity markets, which fell back after a strong start.
Despite weakness in dollar against major currencies in overseas market after the US Federal Reserve announced a surprise rate cut by 75 basis point on Tuesday, the Indian unit came under pressure due to dollar purchases by banks.
In active trade at the Interbank Foreign Exchange (Forex) market, the rupee resumed better at 39.40/43 a dollar on the back of a strong bounce in equity market in early trading session this morning.
It, however, fell back to 39.55/56 in late morning deals against previous close of 39.4850/4950 as the market failed to hold initial gains.
The BSE benchmark Sensex bounced by 946.66 points to 17,676.60 in the initial five minutes of trade, later later fell back to 17,285.26 at 1030 hrs, up 555.32 points from previous day's close of 16,729.94.
Forex dealers said there was all-round dollar buying in exchange market in early trade.
Heavy FII pullout from equity also weighed on the rupee sentiment. Foreign Institutional Investors reported outflows of $3 billion in the last five days.
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