The rupee depreciated 17 paise to 69.32 against the US dollar in opening trade on Thursday as strengthening of the American currency in the overseas market weighed on the local unit.
Forex traders said, rupee is trading in a narrow range as market participants are trading the cautious path amid rising tensions between the US and Iran.
The rupee opened weak at 69.29 at the interbank forex market and then fell further to 69.32, down 17 paise over its last close. The domestic unit had settled at 69.15 against the US dollar Wednesday.
On the global front, the trade concerns between the US and China, and rising US-Iran tensions are poised to dominate a high-stakes G20 summit from Friday.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.13 per cent to 96.34.
Meanwhile, foreign fund inflows and positive opening in domestic equities supported the domestic currency.
Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in Rs 106.26 crore Wednesday, as per provisional data.
Domestic bourses opened on a cautious note Thursday with benchmark indices Sensex trading 74.26 points higher at 39,666.34 and Nifty up 20.50 points at 11,868.05.
Meanwhile, brent crude futures, the global oil benchmark, eased 0.39 per cent to USD 66.23 per barrel.