The rupee pared its early losses in late morning deals to trade at 65.09 per dollar, still down by 6 paise due to persistent demand for the greenback from importers and banks.
The rupee opened lower at 65.13 per dollar as against yesterday's closing level of 65.03 per dollar at the interbank forex market and slipped further to 65.17 per dollar.
It regained some of its lost ground to quote at 65.09 at 1025 hrs.
"Weakness in dollar overseas is cushioning the rupee," a dealer said.
The US dollar slipped against a basket of currencies in early Asian trade, hurt by a media report that suggested the implementation of a centrepiece corporate tax cut under discussion in US tax reforms plans could be delayed.
The BSE Sensex trading higher by 63.94 points, or 0.19 per cent, at 33,434.70 at 1040 hrs.