The rupee weakened by 10 paise to 63.94 against the US dollar in early trade at the interbank foreign exchange market today on increased demand for the American currency from importers and banks.

Forex dealers said the dollar’s gains against major world currencies overseas weighed on the rupee sentiment. However, a record opening in the domestic equity market capped the rupee’s losses, they said.

On Friday, the rupee had gained two paise to end at 63.84 against the dollar in a highly volatile trade despite the outlook for the US currency remaining lacklustre. Meanwhile, the benchmark BSE Sensex rose 100.53 points or 0.28 per cent to 35,612.11 in opening trade.