The rupee today weakened by 11 paise to settle at 44.58/59 against the US currency following dollar demand from importers.

The dollar strengthened against major world currencies in overseas markets, which also weighed on the rupee sentiments, dealers said.

At the Interbank Foreign Exchange (Forex) market, the domestic unit opened strong at 44.35/36 a dollar against its previous close of 44.47/48 and touched the day's high of 44.25 in line with rally in equities.

The Indian benchmark Sensex was up by over 260 points in early trade but reacted downwards to settle up by a mere 31 points or 0.15 per cent on late profit-booking.

In line with equities, the rupee also dropped to the day's low of 44.6450 before concluding at 44.58/59.

In early trade the rupee was supported by firm equities amid consistent capital inflows. Foreign Institutional Investors (FIIs) pumped in over USD 6.3 billion in the month of September.

Dealers said good dollar demand from importers and later short-coverings by operators weighed on the rupee.

In London, the dollar index was up by 0.25 per cent against its major rivals which also pushed the rupee downwards.

Meanwhile, global crude oil was trading above USD 81 a barrel in London today.

The rupee premium for the forward dollar ended higher on fresh paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in March settled up at 133-1/2-135 paise from last Friday's level of 129-131 paise and far-forward maturing in September also remarkably higher at 245-247 paise from 237-239 paise previously.

The Reserve Bank of India has fixed the reference rate for the dollar at Rs 44.37 and the euro at Rs 61.13.

In cross-currency trade, the domestic unit declined against the pound sterling, the euro and the Japanese yen.

The rupee fell back to Rs 70.57/59 against the pound sterling from last Friday's close of Rs 70.41/43 and moved down to Rs 61.13/15 per euro from Rs 61.02/04 previously.

It also reacted downwards against the yen to Rs 53.55/57 per 100 yen from its last close of Rs 53.45/47.