The rupee opened at 83.51 against the dollar.
The rupee depreciated 9 paise to 83.53 against the US dollar in early trade on Tuesday, weighed down by a strong American currency and elevated crude oil prices.
Forex traders said a negative trend in domestic equities and sustained foreign fund outflows also dented investor sentiments.
According to interbank foreign exchange, the rupee opened at 83.51 against the dollar and touched a low of 83.53 in the initial trade, registering a fall of 9 paise over its previous close.
On Monday, the rupee declined 6 paise to settle at 83.44 against the US dollar.
Rupee fell further as foreign portfolio investors continued to buy dollars and sell stocks on risk aversion due to Middle East tensions and US yields heading higher, said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.
"Need to watch what the Reserve Bank of India (RBI) does to counter the rupee depreciation," Bhansali added.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 106.34, higher by 0.13 per cent.
Brent crude futures, the global oil benchmark, rose 0.53 per cent to USD 90.58 per barrel, as Israel weighed response to the Iran attack amidst heightened tensions in the Middle East.
On the domestic equity market, the 30-share BSE Sensex was trading 307.44 points, or 0.42 per cent lower at 73,092.34 points. The broader NSE Nifty was down 76.50 points, or 0.34 per cent, to 22,196.00 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday as they offloaded shares worth Rs 3,268.00 crore, according to exchange data.
On the macroeconomic front, wholesale inflation in the country rose marginally to a three-month high of 0.53 per cent in March compared to 0.20 per cent in the preceding month due to an increase in prices of vegetables, potato, onion, and crude oil.
Moreover, India's merchandise exports dipped marginally in March to USD 41.69 billion, and by 3.11 per cent during the last fiscal year to USD 437.06 billion mainly due to continued geopolitical turmoil, and depressed global trade.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)