The rupee paired its early gains and settled 2 paise lower at 83.18 (provisional) against the US dollar on Wednesday, tracking negative cues from domestic equity markets and a stronger American currency overseas.

Softening crude oil prices and some buying by foreign equity investors, however, supported the Indian currency, forex dealers said.

At the interbank foreign exchange market, the local unit opened stronger by 8 paise at 83.08 and traded between the peak of 83.08 and the lowest level of 83.19 against the greenback. It finally settled at 83.18 (provisional) against the dollar, registering a loss of 2 paise from its previous close.

On Monday, the rupee closed 4 paise lower at 83.16 against the US dollar. Forex markets were closed on Tuesday on account of Dussehra.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.20 per cent higher at 106.48.

Global oil price benchmark Brent crude advanced 0.20 per cent to USD 88.25 per barrel.

On the domestic equity market front, Sensex tumbled 522.82 points or 0.81 per cent to settle at 64,049.06. The Nifty tanked 159.60 points or 0.83 per cent to 19,122.15.

Foreign Institutional Investors bought equities worth Rs 252.25 crore on Monday, according to exchange data.

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