The rupee on Wednesday lost 5 paise to 61.85 against the US dollar in early trade on the Interbank Foreign Exchange market due to appreciation of the American currency against the euro and other currencies overseas.
Dealers attributed the rupee fall to dollar gains against other currencies overseas on upbeat US economic data and demand for the American currency from importers.
They said, however, a higher opening of the domestic equity market capped rupee's losses.
The domestic unit had gained 11 paise to 61.80 against the dollar in yesterday's trade.
Meanwhile, the benchmark BSE Sensex was higher by 52.62 points, or 0.25 %, at 21,223.30 in early trade on Wednesday.