The rupee slipped further from initial losses, trading lower by 7 paise at 67.03 against the American currency in late morning deals on sustained bouts of dollar demand from importers and banks amid lower domestic equities.
The rupee opened slightly lower at 66.98 as against yesterday's closing of 66.96 per dollar at the Inter-bank Foreign Exchange (Forex) market.
The domestic unit hovered in a range of 67.07 to 66.94 during the morning deals before quoting at 67.03 per dollar at 1040 hrs.
The dollar index was down 0.01 per cent at 95.86 against a basket of six currencies in early trade.
Overseas, the US dollar were mostly lower against a basket currencies, while it came to a standstill in early Asian trade as investors look tomorrow's policy meetings of the Bank of Japan and Federal Reserve, with speculation rife that the Japanese central bank will make crucial changes to its easing programme.
Meanwhile, the benchmark Sensex was trading lower by 75.32 points, or 0.26 per cent, to 28,559.18 at 1150 hrs.
Domestic equities succumbed to heavy profit-taking after
two-straight day uptrend amid some caution ahead of Donald Trump's inauguration as the US president later in the day.
Meanwhile, foreign portfolio investors (FPIs) once again turned net sellers and sold shares worth a net of Rs 132.26 crore yesterday.
The benchmark Sensex tanked 274.10 points to close at 27,034.50, while broader Nifty slumped over 85 points to 8,349.35.
In the forward market, premium for dollar drifted further owing to sustained receivings from exporters.
The benchmark six-month premium for June more down to 137.75-139.75 paise from 138.75-140.75 paise and far-forward December 2017 contract also eased to 279-281 paise from 280-282 paise yesterday.
Crude prices edged up for a second day on Friday on expectations that a weekend meeting of the world's top oil producers would demonstrate compliance to a global output cut deal.
