The rupee slipped 1 paisa to 84.07 against the US dollar in early trade on Friday, as the weakening American currency failed to support the local unit amid negative domestic equity markets and higher crude oil prices.
Forex traders said the unabated outflow of foreign funds also weighed on the domestic unit.
At the interbank foreign exchange, the rupee opened flat at 84.06 against the greenback and lost further to 84.07, trading 1 paisa lower from its previous close.
On Thursday, the rupee weakened by 4 paise to close at 84.06 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down by 0.11 per cent to 103.53 points.
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Negative dollar index was attributed to the fresh indication by Chinese central bank to reduce reserve ratio required for the country's lenders by the end of this year, which is expected to give further boost to the world's second largest economy.
Brent crude, the international benchmark, increased 0.21 per cent to USD 74.61 per barrel in futures trade.
On the domestic equity market front, Sensex declined 372.10 points, or 0.46 per cent, to 80,634.51 points. The Nifty also fell 116.70 points, or 0.47 per cent, to 24,633.15 points.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 7,421.40 crore, according to exchange data.
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