The dollar dropped more than 0.2% on the euro and the pound, and was 0.1% weaker against a basket of major currencies at 98.995.
The dollar was last down 0.2% against a basket of major currencies, its index at 98.803, easing from a more than two-year high hit on September 3.
Donald Trump has said that Chinese officials had made two "very good calls" and that "they want to make a deal"
Sakshi Batra does 3-Point Analysis of the rupee’s fall and how investors can benefit from this downslide of the Indian currency.
Tariff concessions seem more aimed at protecting the wallets of US consumers. No real progress has been made in US-China trade talks.
It is believed that the Chinese central bank deliberately allowed the currency to fall in response to the ongoing US-China trade war.
The bonds have been under pressure in recent days on renewed tension over Kashmir, which is claimed by both India and Pakistan.
In the reporting month, the central bank bought $2.086 billion and sold $1.261 billion in the spot market as the rupee was under pressure.
Spot gold was down 1.3 percent to $1,290.34 per ounce as of 1:55 p.m. EDT (1755 GMT). U.S. gold futures settled 1.6 percent lower at $1,293.3.
Spot gold was up 0.2 percent at $1,299.34 per ounce as of 0101 GMT, after touching its highest since March 28 at $1,303.61 in the previous session.
The rapid changes in the monetary policy stances of global central banks have led to the market repositioning
Ahead of the fiscal year end, the RBI has announced a dollar-rupee swap window to provide durable liquidity.
The RBI should also reduce the Cash Reserve Ratio (CRR) to ensure enough liquidity
As of 0340 GMT, spot gold and the U.S. gold futures were down 0.1 percent at $1,318.50 and $1,320.10 per ounce respectively.
Spot gold was down 0.2 percent at $1,306.51 per ounce, as of 0102 GMT, after falling 0.4 percent in the previous session.
At the Interbank Foreign Exchange (forex) market, the rupee opened at 71.08, but during the day it came under selling pressure. The local unit moved in a range of 70.94 to 71.39 and finally finished at 71.25 per dollar, down by 17 paise against its previous close.
At the Interbank Foreign Exchange, the Indian currency opened significantly higher but erased the morning gains during the course of the day due to month-end dollar demand from oil importers and shed 22 paise from the day's high.
Also, fresh foreign fund inflows propped up the rupee. However, heavy selling in domestic equity market capped the gains of the local unit to some extent.
This is the second successive week of loss for the Indian currency. During the week the domestic unit registered a loss of 27 paise. In the previous week, the local unit had slumped by 81 paise.
Higher bond yields, which spiked on concerns that the government may over-shoot the fiscal deficit target in an election year, too weighed on the domestic unit, forex traders said.
A weak US dollar against major global currencies and fall in crude oil prices, however, capped losses of the domestic currency.
Here's a roundup of the key happenings in the commodities market, with a deep dive into some of the most active counters
Traders said sustained selling of the American currency by exporters and banks ahead of the US Fed policy decision propped up the rupee, while sliding oil prices eased current account deficit concerns.
The Federal Open Market Committee (FOMC) is widely expected to raise interest rates at its two-day meeting starting later in the day, but the focus will be on its outlook for 2019.