Month-end dollar demand from oil companies offsets dollar sales by foreign banks.
Some traders speculate custodian banks likely selling on behalf of Flipkart which is said to have raised $1 billion in funds recently.
The rupee-dollar pair seen in 59.90 to 60.30 range during the day with month-end import demand seen supporting the pair. Nifty currently trading down 1 percent and will be watched for clues on foreign fund flows.
Indian rupee down 5 paise to 60.17 against dollar in early trade
The rupee fell marginally by five paise to 60.17 against the US dollar in early trade today at the Interbank Foreign Exchange due to appreciation of the American currency overseas amid lower opening in the domestic equity market.
Dealers attributed the domestic currency's fall to gains made by the dollar against other currencies overseas and fresh demand for the American unit from importers.
The rupee had retreated from nearly two-week high and ended three paise lower at 60.12 against the Greenback in yesterday's trade.
Meanwhile, the benchmark BSE Sensex was down 25.15 points, or 0.09 per cent, at 26,246.70 in early trade today.