The rupee lost 16 paise to Rs. 55.43 against the US dollar in early trade on Friday at the Interbank Foreign Exchange market on strengthening of the American currency overseas.
Forex dealers said besides dollar's gains against euro and yen in the overseas markets following a rise in the US data, a weak opening in the stock market also put pressure on the domestic currency.
The rupee had strengthened by 15 paise to close at 55.27 against the US dollar on Thursday on sustained capital inflows.
Meanwhile, the BSE benchmark Sensex fell by 33.18 points, or 0.19%, at 17,527.69.