The rupee trimmed its early losses, but was still marginally down by 2 paise at 63.37 against the dollar in morning deals on some demand for the US currency from importers.
The rupee resumed sharply lower at 63.43 as against yesterday's closing level of 63.35 at the Interbank Foreign Exchange (Forex) market.
It slid further to 63.49 per dollar but later pared the losses to quote at 63.37 at 1030 hrs.
It moved in a range of 63.36-63.49 per dollar during morning trade.
"Rallying domestic equities largely lifted the rupee sentiment," a dealer said.
In New York, the US dollar hit its highest level in nearly nine years against the basket of currencies in early trade, drawing strength from the US economy's outperformance and the diverging outlook for monetary policies among major economies.
Meanwhile, the BSE 30-stock index, Sensex rallied by 328.42 points, or 1.19 per cent, in late morning trade.
