The rupee today weakened by 31 paise to close at a nearly two-week low of 55.94 a dollar tracking weak trend in stocks amid a smart rise in the American currency overseas as fears over EU crisis deepened further.

Forex dealers said sustained dollar demand from importers also put pressure on the rupee while persistent capital inflows provided some cushion for the rupee.

The rupee resumed slightly better at 55.60 a dollar from previous close of 55.63 at the Interbank Foreign Exchange (Forex) market. It soon touched 55.53 on initial weakness in dollar value in early Asian trade today.

However, the trend turned negative as the rupee fell back to a low of 55.95 after mid—session.

The euro fell to a two-year low of USD 1.2175 against the dollar as investors fretted over the lack of progress in tackling the worsening EU debt crisis.

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