MUMBAI: The rupee declined 6 paise to 87.18 against the US dollar in early trade on Friday, tracking lacklusture sentiment worldwide triggered by trade-related uncertainties and relentless outflow of foreign capital from domestic equities.
However, weakening American currency index and lower level of crude oil prices helped the Indian currency prevent a sharp fall, forex traders said.
At the interbank foreign exchange, the rupee opened at 87.13 and lost further to trade at 87.18 against the greenback in early deals, registering a depreciation of 6 paise from its previous closing level.
Snapping its three-day rally, the rupee settled 6 paise lower at 87.12 against the US dollar on Thursday. It had gained 31 paise in the preceding three consecutive sessions.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.04 per cent at 103.99.
Brent crude, the global oil benchmark, went up marginally by 0.20 per cent but stayed at six-month low levels of USD 69.60 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex was trading 116.64 points, or 0.16 per cent, lower at 74,223.45 points, while the Nifty was down 19.30 points, or 0.09 per cent, at 22,525.40 points.
Foreign institutional investors (FIIs) offloaded equities worth Rs 2,377.32 crore on net basis on Thursday, according to exchange data.
On the global macroeconomic front, traders are expected to keep a close watch on the US Federal Reserve chief Jerome Powell's commentary and the central bank's balance sheet to be released on Friday.
Meanwhile, President Donald Trump said he has postponed 25 per cent tariffs on most goods from Mexico for a month after a conversation with that country's president.
Trump's announcement comes after his Commerce Secretary Howard Lutnick said tariffs on both Canada and Mexico would "likely" be delayed.