The rupee is trading at 59.45/46, after hitting 59.50, earlier in the session, its strongest since May 15 and above Thursday's close of 59.25/26, as losses in domestic shares and tensions in Iraq aid sentiment for the safe-haven dollar.
Asian stocks slid and crude oil scaled nine-month highs on Friday as escalating civil war in Iraq hit risk appetite.
Traders expect the pair to see some resistance around 59.50 levels for the day with strong resistance likely at 59.60.
The domestic stock market trading down 0.2 percent and will be watched for cues on foreign fund flows.
Asian currencies were trading mixed against the dollar.
RUPEE: EARLY TRADE
(PTI) The rupee weakened by eight paise to 59.33 against the US dollar in early trade today at the Interbank Foreign Exchange market due to increased demand for the American currency from importers.
However, a higher opening in the domestic equity market and the US dollar's weakness against other currencies overseas, capped the rupee's fall.
Forex dealers said fresh demand for the dollar also put pressure on the rupee.
The rupee ended two paise higher at 59.25 in yesterday's session on range-bound movements.
Meanwhile, the benchmark BSE Sensex rose 110.69 points, or 0.43 per cent, to 25,686.90 in early trade today.