MUMBAI: The rupee declined 4 paise to 86.44 against the US dollar in early trade on Thursday amid a firm American currency, rising crude oil prices and outflow of foreign funds.
However, positive domestic equity markets resisted a sharp fall in Indian currency, forex traders said.
At the interbank foreign exchange, the rupee opened at 86.42 and slipped further to 86.44 against the greenback in initial deals, trading 4 paise lower from its previous close.
The rupee settled with a gain of 13 paise at 86.40 against the dollar on Wednesday, a day after rebounding 17 paise from its lowest-ever level.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.04 per cent higher at 108.96.
Brent crude, the global oil benchmark, rose 0.37 per cent to USD 82.33 per barrel in futures trade.
Analysts said concerns over geopolitical uncertainties are likely to add volatility in dollar until the US gets new administration under President Donald Trump.
In the domestic equity market, the 30-share BSE Sensex was trading 429.15 points, or 0.56 per cent, higher at 77,153.23 points, while the Nifty was up 136.75 points, or 0.59 per cent, at 23,349.95.
Foreign institutional investors (FIIs) offloaded equities worth Rs 4,533.49 crore on Wednesday.