The Indian currency was trading 57 paise lower at 72.04 against the US dollar at 1548 hours.
Rupee is trading at 71.77 against dollar amid rising concerns over the US-China trade deal.
At the interbank foreign exchange, the rupee opened at 71.36 against the US dollar.
Moody's has changed India's outlook ratings to 'negative' from 'stable.'
Sustained foreign fund inflows and easing crude oil prices capped the losses.
Sustained foreign fund inflows supported the rupee though the gains were capped by hardening crude oil prices, traders said.
Sustained foreign fund inflows, positive opening in domestic equities and easing crude oil prices supported the local unit.
A barrage of rate cuts from the RBI this year has done nothing concrete so far to revive a slowing Indian economy.
Weakening of the US dollar vis-a-vis other currencies and easing crude oil prices restricted the fall, forex brokers said.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.07 per cent to 97.91.