The rupee resumed marginally higher at 52.65 per dollar as against the last closing level of 52.68 at the Interbank Foreign Exchange (Forex) Market.
However, it declined immediately to 52.88 a dollar before quoting at 52.80 at 1100 hours.
It moved in a range of 52.56 and 52.88 per dollar during the morning deals.
In New York, the US dollar lost ground against major rivals yesterday as a sharp drop in jobless claims last week dulled the greenback's safe-haven appeal. Investors also took a downgrade of Spain's debt rating to near-junk status in stride, helping the euro to recover.
Meanwhile, the Indian benchmark Sensex moved up by 19 points or 0.10 pc to 18,823.65 at 1100 hours.