The rupee tumbled by 32 paise to end at 74.37 against the US currency on Wednesday, weighed down by a muted trend in domestic equities and strong greenback in the overseas market.
Besides, persistent foreign fund outflows also put pressure on the domestic unit, forex dealers said.
At the interbank foreign exchange market, the local currency opened at 74.11 and witnessed a high of 74.06 and a low of 74.42 against the US dollar in the day trade. The local unit finally settled at 74.37 a dollar, down 32 paise over its previous close of 74.05.
According to Emkay Global Financial Services, "Inflationary concerns are increasing globally, and as we proceed with the week, the IPO related inflows may dry out, keeping USD/INR spot afloat".
The key catalyst for the forex market is the US inflation data. A lower-than-expected CPI figure will reflect a 'transitory' factors, however, a higher-than-expected data or a figure in line with market consensus will induce the Fed to accelerate the pace of asset purchases, it said.