The rupee pared initial gains to drop to a fresh all-time low of 71.79 against the US currency, falling 21 paise in late morning deals on Wednesday on sudden bouts of dollar-buying by banks and importers. Earlier, the rupee resumed higher at 71.43 against Tuesday's closing level of 71.58 a dollar at the interbank foreign exchange market here.
The Indian unit was trading on a volatile note, moving in a wide range quoting between 71.40 and 71.79 during morning deals."Rupee's speculative demand is causing volatility amid crisis in the emerging market currencies and consistent rise in the crude oil prices," a dealer said.
The dollar strengthened against a basket of currencies overseas as the US economy continued to exhibit strength amid a lingering threat of escalation in the US-China trade conflict, leading to a fall in the domestic unit.