Moody's has changed India's outlook ratings to 'negative' from 'stable.'
Sustained foreign fund inflows and easing crude oil prices capped the losses.
Sustained foreign fund inflows supported the rupee though the gains were capped by hardening crude oil prices, traders said.
Sustained foreign fund inflows, positive opening in domestic equities and easing crude oil prices supported the local unit.
A barrage of rate cuts from the RBI this year has done nothing concrete so far to revive a slowing Indian economy.
Weakening of the US dollar vis-a-vis other currencies and easing crude oil prices restricted the fall, forex brokers said.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.07 per cent to 97.91.
Forex inflows through Bajaj Finance share sale to qualified institutional investors helped the rupee hold strong, said analysts.
Rupee is trading at 70.73 against dollar, following increased selling of the American currency by exporters and banks.
A higher opening in domestic equity market, and hopes for a US-China trade deal also supported the local currency.