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Indian rupee weakened against the US dollar on Thursday, tracking a strong American currency overseas ahead of key US inflation data that could offer further clarity on the Federal Reserve's interest rate plan. Moreover, rising US Treasury yield and hawkish stance of the US Federal Reserve also dampened rupee sentiments. Local unit further weakened amid foreign fund outflows in the market. Foreign Institutional Investors were net sellers in the capital markets on Wednesday, selling shares worth Rs 5,841.84 crore, exchange data showed. But, retreating crude oil prices capped the rupee's sharp fall.

The partially convertible currency is currently trading at 83.42, weaker by 2 paise from its previous close of 83.40 on Wednesday. The currency touched a high and low of 83.4475 and 83.3775 respectively.