Brokers said the US dollar firmed up against major global currencies following easing of tensions between the White House and the Fed, which calmed investors' nerves.
Progress in US-China trade negotiations and strong consumer spending data in the US added to the momentum, they added.
At the Interbank Foreign Exchange, the rupee opened sharply lower at 70.27 a dollar against its previous close of 70.06. The domestic unit moved in a range of 70.39 to 70.18 during the day, before closing at 70.35.
Brent crude futures dropped 3.78 per cent to USD 53.20 per barrel.
On a net basis, foreign portfolio investors (FPIs) bought shares worth Rs 80.28 crore Wednesday, while domestic institutional investors (DIIs) were net sellers to the tune of Rs 137.63 crore, provisional data available with BSE showed.
Meanwhile, the BSE benchmark Sensex jumped 157 points Thursday amid expiry of December series derivatives contracts and positive global cues.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.3270 and for rupee/euro at 80.0223. The reference rate for rupee/British pound was fixed at 88.9829 and for rupee/100 Japanese yen at 63.25.