The rupee weakened by 9 paise to trade at 62.02 against the dollar in early trade on Monday at the Interbank Foreign Exchange market due to increased demand for the US currency from oil importers.
Forex dealers said fresh demand for the American currency ahead of the interim Budget for 2014-15 mainly put pressure on the rupee but a higher opening in the domestic equity market and the dollar's weakness against other currencies overseas, capped the rupee's fall.
The rupee bounced back by 49 paise to close at a three-week high of 61.93 against the US dollar in the previous session on Friday, tracking a smart rise in stocks after wholesale inflation fell to an eight-month low.
Meanwhile, the benchmark BSE Sensex rose by 102.92 points, or 0.50%, to 20,469.74 in early trade on Monday.