The rupee started on a choppy note on Monday as investors turned cautious tracking heavy selling in domestic equities and worries over a new variant of COVID-19.
At the interbank foreign exchange, the rupee opened higher by 5 paise at 74.84 against the greenback and later touched a high of 74.82.
However, the local unit pared gains in late morning deals amid high volatility. The rupee was trading down by 9 paise at 74.98 at 1035hrs.
On Friday, the rupee had plunged by 37 paise or 0.50% against the U.S. dollar to close at a nearly month's low of 74.89, as investors resorted to risk-off sentiment.
Investor concern resurfaced about lockdowns amid a rise in COVID cases in Europe and a new variant, detected in South Africa.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.19% to 96.27.
Meanwhile, global oil benchmark Brent crude futures advanced 4.06% to $75.67 per barrel.
Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth ₹5,785.83 crore, as per exchange data.
On the domestic equity market front, the 30-share Sensex was trading 98.48 points or 0.17% lower at 57,008.67, while the broader NSE Nifty declined 44.85 points or 0.26% to 16,981.60.