The rupee depreciated by six paise to 74.99 against the US dollar in early trade on Wednesday, tracking Asian currencies and weakness in domestic equity markets. After starting the session mildly higher at 74.86 compared to its previous close of 74.93, the rupee moved in a range of 74.86-74.99 in the first half of the four-hour session. In mid morning deals, it was flat at 74.94 against the greenback. Strength in the dollar overseas and volatility in domestic share markets put pressure on the rupee, according to analysts.
At Tuesday's close, the rupee has recovered 2.57 per cent from a record low of 76.91 logged in April, but still it is down 5 per cent against the American currency so far this year. That makes the rupee the worst performing Asian currency.
The rupee is expected to continue in a narrow range in the near term, say analysts.
"The RBI continued to buy dollars and pay forwards, crushing shorts in trade yesterday. We could see similar price action today as well. There is not much on the data front. Price action is likely to largely flow driven," said Abhishek Goenka, founder and CEO of IFA Global, a forex advisory firm.
"The rupee is likely to trade in a range of 74.70-75.10 intraday. Nationalised banks may continue to intervene to smoothen volatility," he added.
The dollar index - which gauges the US currency against six major peers - was last seen trading 0.05 per cent higher, having risen as much as 0.16 per cent earlier on Wednesday.
Crude oil rates moved lower after industry data showing a build in US stockpiles added to worries about oversupply, but hopes for a swift economic recovery in China limited losses.
Brent crude futures - the global benchmark for crude oil rates - were last seen trading 0.20 per cent lower at $42.98 per barrel.