The Indian rupee opened on a cautious note and fell 7 paise to 71.00 against the US dollar in early trade on Friday tracking weak opening in domestic equities and foreign fund outflows.
At the interbank foreign exchange, the rupee opened at 70.98 then fell to 71.00 against the dollar, showing a decline of 7 paise over its previous closing.
The Indian rupee on Thursday had closed at 70.93 against the dollar.
Forex traders said the rupee pared its early gains despite the US-China signing the phase-1 trade deal, as huge uncertainty still remains, which might make it difficult for China and the US to reach a comprehensive trade deal.
The United States on Wednesday signed the first phase of a trade deal with China, which President Donald Trump described as historic, concluding more than a year of tough negotiations between the two largest economies of the world.
Traders said rise in crude oil prices and foreign fund outflows weighed on the domestic unit.
Domestic bourses opened on a cautious note on Friday with benchmark indices Sensex trading 15.17 points up at 41,947.73 and Nifty lower by 9.85 points at 12,345.65.
Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they sold shares worth Rs 395.24 crore on Thursday, as per provisional data.
Meanwhile, brent crude futures, the global oil benchmark, eased by 0.03 per cent to USD 64.60 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.02 per cent to 97.34.
The 10-year government bond yield was at 6.62 in morning trade.
Meanwhile, on the global front, US President Donald Trump on Wednesday refused to roll back the massive tariff imposed on import of Chinese goods despite having succeeded to sign the first phase of a trade deal with China.
During a historic signing ceremony at the White House, Trump said he will roll back the tariffs only if the second phase of the trade deal is signed between the two economic giants.