The rupee declined 9 paise to 82.74 against the US dollar in early trade on Tuesday as rising crude prices weighed on investor sentiment.
Besides, foreign fund outflows put pressure on the domestic unit, forex dealers said.
At the interbank foreign exchange, the domestic unit opened weak at 82.71 against the dollar, then slipped further to 82.74, registering a fall of 9 paise over its previous close.
In the previous session on Monday, the rupee appreciated 17 paise to close at 82.65 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.19 per cent to 104.11.
Brent crude futures, the global oil benchmark, advanced 0.45 per cent to USD 84.30 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 61.14 points or 0.10 per cent higher at 60,627.56. The broader NSE Nifty rose 17.90 points or 0.1 per cent to 18,032.50.
Foreign Institutional Investors (FIIs) were net sellers in capital markets on Monday as they sold shares worth Rs 497.65 crore, according to exchange data.
"... month-end exporter selling is likely to cap upside in USD/INR. Rupee is likely to trade in a 82.60-82.90 range with sideways price action," IFA Global Research Academy said in a research note.
According to an official announcement on Monday, China will scrap quarantine for international travellers from January 8 next year, as it reopens its international borders and comes out of international isolation after nearly three years.