Here are 10 things to know about rupee:
At the forex market, the domestic unit opened at 71.08. It then swung between a low of 71.49 and a high of 70.94 in intraday deals, before finally ending at 71.24, showing a loss of 17 paise against the previous close.
Investors' sentiment took a beating after Pakistani fighter jets on Wednesday violated air space in Jammu and Kashmir's Poonch and Nowshera sectors, following which the forces retaliated, according to the PTI report.
"This was the second day of loss for rupee amid escalation of tension with Pakistan and month-end dollar demands from oil importers," said V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities. "The currency failed to take advantage of a weaker US dollar," he said.
The 10-year benchmark bond yield, meanwhile, rose on the day to end the session at 7.6722 per cent, according to news agency Reuters.
The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.07 per cent to 95.93 after the US Federal Reserve chief reiterated that policy makers will stay "patient", and they are in "no rush to make a judgment" on future interest-rate moves.
Domestic equity benchmarks also ended the session on a lower note. In intraday deals, the S&P BSE Sensex fell as much as 636 points from day's highest point, before closing 68 points lower at 35,905. The Nifty 50 index slipped 189 points from its highest level in intraday trade, before settling 29 points or 0.26 per cent lower at 10,807.
Foreign investors (FIIs), meanwhile, remained net buyers in capital markets, putting in Rs 423 crore on a net basis on Wednesday.
Brent crude futures, the global oil benchmark, climbed 1.17 per cent to $65.97 per barrel.
Earlier on Tuesday, government data showed fiscal deficit touching Rs. 7.7 lakh crore ($108.36 billion) in April-January. That meant the deficit stood at 121.5 per cent of the budgeted target for the current fiscal year.
The government is due to release GDP or gross domestic product data on Thursday.
(With inputs from agencies)