The rupee depreciated by 11 paise to 70.60 against the US dollar in opening trade on Wednesday, amid increased demand for the greenback from importers and banks.
Forex dealers said strengthening of the American currency in the overseas market weighed on the domestic currency.
However, fresh foreign fund inflows, easing crude prices and positive opening in domestic equities supported the rupee.
The rupee opened weak at 70.60 at the interbank forex market. It however pared the initial loss and was last seen trading at 70.55 against the greenback.
The rupee had on Tuesday strengthened by 43 paise to close at 70.49 against the dollar.
Foreign investors put in Rs 751.92 crore on a net basis in capital markets Tuesday, provisional exchange data showed.
Brent crude futures, the global benchmark for crude oil, eased 0.76 per cent to $65.36 per barrel.