The rupee pared its early gains and was trading 2 paise lower at 68.36 against the US dollar in late morning deals on bouts of dollar demand from banks and importers amid bearish domestic equities.
The Indian currency opened marginally higher by 6 paise at 68.28 as against Thursday's level of 68.34 per dollar at the Inter-bank Foreign Exchange (Forex) market.
It hovered in the range of 68.39 to 68.27 during the morning deals, before quoting at 68.36 per dollar at 1025 hrs.
The dollar index were trading down 0.19 per cent at 100.76 against a basket of six currencies.
Overseas, the dollar sagged early Asian trade against its peers as investors were cautious ahead of a looming US jobs report that could set the tone in coming days.
The greenback was poised to end lower against a basket of currencies this week during which it gave up some of its recent robust gains.
In New York yesterday, the dollar lost some ground against a basket of currencies as traders booked gains following a solid November and on caution ahead of today's government payrolls report.
Meanwhile, the benchmark BSE Sensex were trading down by 210.64 points or 0.79 per cent at 26,349.28 at 1030 hrs.
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