The rupee pared early gains to settle 16 paise lower at 73.64 (provisional) against the US dollar on Tuesday even as domestic equity market traded in the positive territory. At the interbank forex market, the domestic unit witnessed high volatility. It opened on a strong note at 73.33, but lost ground during the day and finally closed at 73.64 against the US dollar, registering a fall of 16 paise over its previous close of 73.48.
During the session, the rupee touched an intraday high of 73.33 and a low of 73.72 against the greenback.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.16 per cent to 92.90.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 266.63 points higher at 39,023.26, and the broader NSE Nifty advanced 78.35 points to 11,518.40.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 298.22 crore on a net basis on Monday, according to exchange data.
Brent crude futures, the global oil benchmark, rose 0.28 per cent to $39.72 per barrel.