Dealers said ''Rupee fell to a three-week low after staying in a narrow band most of the day, weighed down by overseas investors repatriating funds and by traders covering short dollar positions.
Rupee opened higher at 39.94/96 and later it fluctuated in a wide range between at 39.92 and 40.05/06 per dollar.
Dealers expect that the local unit will have a tendency of getting stronger, though the RBI's intervention would hold its appreciation against the dollar.
Reserve Bank of India today fixed the reference rate for the US Dollar at Rs 39.95, up by one paise from yesterday's rate at Rs 39.94.
The six-month premium was quoted at 2.50/52 (2.91/93) per cent and annualised premium closed at 2.02/04 (2.29/31) per cent.
The local currency ended the session at 63.70/72 (63.62/64) against the Euro. It closed at 79.25/27 (79.65/67) per unit against the Pound Sterling. The local unit closed at 38.79/81 (39.69/71) per hundred units against the Japanese Yen.