The rupee on Wednesday erased early losses and closed five paise higher at 55.62 on fag end dollar selling by exporters and continued capital inflows.
At the Interbank Foreign Exchange (Forex) market, the rupee in the morning resumed slightly lower at 55.69 a dollar from overnight close of 55.67.
It later declined further to a day's low of 55.75 on sluggish local stocks amid some month-end dollar demand from importers.
However, late dollar selling by exporters amid persistent foreign fund inflows in equities worth Rs 140 crore helped the rupee recover its initial losses.
The rupee later touched a high of 55.56 before concluding at 55.62, a gain of five paise over yesterday's
closing.
Traders said the rupee also drew some comfort from euro's strength which held near recent highs against dollar riding on hopes that European Central Bank will take steps to tackle the debt crisis.
Investors were also wary of the dollar in the run-up to a meeting of US central bankers at Jackson Hole, Wyoming.
The euro was last trading flat at $1.255 ahead of the leaders of Germany and Italy meeting today to discuss the Euro crisis.
"The rupee was again seen in a narrow range before the GDP data and Fed meeting on Friday.
"The GDP growth figures are expected on lower side on account of no recovery in industrial and manufacturing sectors. We expect the market to be stable before the ECB meet on September 6, " said Abhishek Goenka, Founder & CEO, India Forex Advisors.