Erasing early gains, the rupee fell on Friday by four paise to Rs 54.32 to a dollar in late morning trade due to good dollar demand from importers amid weak local equity market.
The rupee resumed lower at Rs 54.35 per dollar as against the last closing level of Rs 54.28 at the Interbank Foreign Exchange (Forex) Market. It moved down further to Rs 54.36 before quoting Rs 54.32 per dollar at 10am.
It moved in a range of Rs 54.26 and Rs 54.36 per dollar during the morning deals.
In New York, the euro fell on Thursday trading at a fourth-month low level against the US dollar as debt-troubled Cyprus worked to meet a bailout-related deadline, and as a purchasing-managers' index pointed to a deepening economic downturn in the Eurozone.
Meanwhile, oil prices were mixed in Asia early on Friday amidst fears of a possible default by Cyprus as the European Central Bank said it would halt funding to lenders if a new bailout deal was not found, analysts said.
New York's main contract, light sweet crude for delivery in May added 11 cents to $92.56 a barrel.
Meanwhile, the BSE-30 share index, Sensex, dropped by 30.68 points, or 0.16%, quoting 18,762.19 at 10am.