The rupee depreciated 13 paise to 74.32 against the US dollar in opening trade on Thursday tracking muted domestic equities and strong American currency.
At the interbank forex market, the domestic unit opened at 74.28 against the US dollar, then gained ground and touched 74.23 against the American currency. In volatile trade, the local unit also touched 74.32 against the greenback, down 13 paise over its previous close.
On Wednesday, rupee had settled at 74.19 against the US dollar.
American pharmaceutical giant Pfizer and its German partner BioNTech said they have concluded phase 3 study of their mRNA-based COVID-19 vaccine candidate BNT162b2, meeting all primary efficacy end points.
Notwithstanding the positive news, the rupee was trading in a narrow range "as rise in COVID-19 cases in Europe and the US offset positive sentiments surrounding the potential vaccine," Reliance Securities said in a research note.
Further, the US dollar rebounded this morning in Asian trade and could cap gains, the note added.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.16 per cent to 92.46.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 11.80 points lower at 44,168.25, while the broader NSE Nifty rose 4.30 points to 12,942.55.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 3,071.93 crore on a net basis on Wednesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.52 per cent to USD 44.11 per barrel.