The rupee snapped its initial gains to trade down by 4 paise at 55.45 against the dollar in late morning Wednesday deals following fresh demand of dollars from importers and some banks.
The rupee opened higher at 55.35 per dollar as against the previous closing level of 55.41 at the Interbank Foreign Exchange (Forex) market.
It slightly moved up to 54.34 in early deals, before quoting 55.45 per dollar at 11:00am, down by 4 paise over its last close.
The rupee hovered between of 54.34 and 55.49 per dollar during late morning trade.
In international market, the US dollar slipped against basket currencies on investors cautiousness ahead of Federal Reserve chairman Ben Bernanke's views in Joint Economic Committee meet over state of US economy as well as Fed's current easing programme.
Meanwhile, the BSE-30 share barometer Sensex was trading higher by 66.62 points or 0.32% to 20,175.84 at 11:05am.