The rupee depreciated 11 paise to ₹70.60 against the US dollar in opening trade on Wednesday on increased demand for the greenback from importers and banks.
Forex dealers said, strengthening of the American currency in the overseas market weighed on the domestic currency.
However, fresh foreign fund inflows, easing crude prices and positive opening in domestic equities supported the rupee and restricted the fall.
The rupee opened weak at₹ 70.60 at the interbank forex market down 11 paise over its last close. The local currency however pared the initial loss and was trading at 70.55.
The rupee on Tuesday strengthened by 43 paise to close at 70.49 against the US dollar.
Foreign investors put in ₹751.92 crore on a net basis in capital markets Tuesday, provisional exchange data showed.
Brent crude futures, the global oil benchmark, eased 0.76 per cent to $ 65.36 per barrel.
Indian bourses furthered gains in early trade Wednesday, with benchmark indices Sensex and Nifty adding 157 points and 53 points, respectively, on sustained buying mainly in stocks of finance, metal and capital goods sectors.
