The rupee edged down to 53.76/77 versus its previous close of 53.6950/7150 as a sharp fall in the euro to three week lows helped the dollar index gain to a seven-week high.
Traders say the euro's losses triggers dollar short-covering in the domestic market, while demand from oil and gold importers to a small extent adds to the rise.
Sharp gains in the domestic share market however limit a much sharper rise in the pair as custodian banks step in to sell the dollar around 53.75 to 53.80 levels.
