As against the Wednesday's closing of 67.43, the domestic unit opened flat at 67.42 for a dollar. But going ahead, there can be a further fall by 1-2% in case the Italy crisis deepens. Investors can shift positions in assets backed by dollar and yen and Indian currency may lose as it is also the part of the emerging market currency basket and get bogged down due to the dollar gaining strength.

In yesterday's trade, rupee gained in the latter session buoyed by the Q1 growth number in the US which forecast a slower growth in the US at 2.2% against the 2.3% estimated earlier.

In the domestic market rupee's movement will also get direction from the GDP data due to be released for the quarter ended March.

During the last one month, rupee after losing 1.15% recouped losses due to moderating crude oil prices and stabilizing US treasury yield.

What is the Italy political crisis that is worrying investors globally?

Italy has the third largest economy in the eurozone and the country is heading for elections in the wake of political turmoil and market watchers fear that Italy may crash out of the European Union or not follow its rules and give yet another trigger to eurozone crisis.

So, the fear of an yet another eurozone crisis wherein Greece was the last source is expected to trigger a fresh rout in emerging market currencies including Indian rupee.