The rupee trimmed its losses against the American currency but was still quoted lower by nine paise to 62.29 per dollar on demand from banks and importers.
The rupee resumed lower at 62.35 per dollar as against the last closing level of 62.20 at the Interbank Foreign Exchanges (Forex) Market and dropped further to 62.44 per dollar.
However, it recovered from initial losses and was quoted at 62.29 per dollar at 1045 hours on mild selling of the US currency from banks on persistent capital inflows from foreign funds into the equity market.
It moved in a range of 62.29-62.44 per dollar during late morning deals.
In New York, the US dollar swung higher against many of its rivals yesterday after the Federal Reserve released the minutes from its last policy meeting which showed widespread dissent about the path forward on policy normalisation.
Meanwhile, the benchmark BSE Sensex dropped by 79.88 points, or 0.39%, to 20,643.09 at 1045 hours.