The rupee further fell to 54.69 against the dollar as the greenback continued to grow stronger against other currencies overseas.
The Indian unit opened 32 paise down at a three-week low of 54.57 at the Interbank Foreign Exchange market. The unit had closed lower at 54.25 on Thursday.
According to forex dealers, increased demand for the dollar from banks and importers has also put pressure on the rupee. However, positive domestic equity markets capped a further sharp fall as the rupee recovered to 54.44 per dollar.
However, at 2.35 p.m., the rupee dropped to 54.68 as the American currency strengthened to about four-year high against the Japanese yen and most Asian currencies were trading lower against the dollar.
The BSE-benchmark Sensex was trading 105 points higher (up 0.53 per cent) at 20,044 points.
Investors will watch out for the consumer price inflation data on Monday for cues on the future course of monetary policy in June.
