Later, it gained marginally and moved between 53 and 53.16 per dollar before quoting at 53.11 at 1040 hrs.
Sustained dollar demand from banks and importers in view of firm dollar in the overseas market affected the rupee value against the dollar, a forex dealer said.
In New York, the dollar index pushed above the 80 mark for the first time in a month yesterday.
Tracking weak stock markets, the rupee had closed below the 53-level against the dollar yesterday - first time in nearly two weeks - amid S&P saying it could downgrade India's sovereign credit rating to junk grade within 2 years in the absence of steps to check fiscal deficit and improve investment climate.
After breaching the 53 mark in early trade, the rupee had closed lower for the fourth straight day yesterday as it dropped 33 paise to 53.05 compared to previous close of 52.72.
In the equity market meanwhile, the BSE 30-stock index, Sensex, declined 30 points or 0.16 per cent to 18,601.34 at 1045 hrs.