Reuters Market Eye - The rupee is trading at 61.33/34 after touching 61.3175, its highest since December 11 and below its close of 61.5350/5450 on Thursday.
Traders say good foreign bank selling of the greenback likely on behalf of clients looking to invest in the debt market is hurting the pair.
Domestic shares trading down 0.6 percent and helping limit any further sharp fall in the pair.
The U.S. dollar faded a little on Friday after a mixed bag of U.S. economic data, while the Australian dollar was vulnerable after disappointing jobs figures the previous day knocked it below an important support level to a 3-1/2-year low.
(Reporting by Swati Bhat)