In see-saw trade, the rupee washed out its 40 paise gain in early trade to close 16 paise lower at 55.31 against the dollar tracking a weak stock market amid fresh demand of the American currency from importers as a late-round of risk-aversion set in.

At the interbank foreign exchange market, the domestic unit commenced higher at 54.90 and immediately touched a high of 54.76 in line with early rally in local stocks as June inflation numbers showed an easing trend.

However, the positive trend was short-lived as the rupee reacted downwards and touched a low of 55.38 as dollar demand outstripped supply, putting the local currency under pressure.

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