Mumbai: The rupee declined by 12 paise to 55.74 against the dollar in early trade on Thursday at the Interbank Foreign Exchange market on month-end demand from oil importers for the American currency.
Besides increased dollar demand from importers, a lower opening in the domestic equity market put pressure on the rupee, forex dealers said.
The BSE benchmark Sensex fell by 79.47 points, or 0.45 percent, to 17,411.34 in early trade.
However, dollar's weakness against euro and other currencies overseas after US economic data capped rupee's losses, they added.
The rupee had gained 5 paise to end at 55.62 against the dollar on selling of the American currency by exporters in Wednesday's session.