The rupee fell sharply by 27 paise to 45.80 against the US currency in late morning trade due to strong dollar demand from banks and importers.
Sustained demand for dollar in view of firm US currency in New York mainly affected the rupee value, a dealer said.
The dollar turned higher in New York yesterday, especially against the Japanese yen and British pound, as positive US economic data trumped optimism about Europe and worries that China, now the world's second-largest economy, might be pushed towards tightening monetary policy.
In active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit opened lower at 45.63/64 a dollar from its previous close of 45.53/54 and dropped further to 45.80 per dollar before quoting at 45.74/75 per dollar at 1030hrs.
It moved in range of 45.63 per dollar and 45.80 per dollar in morning deals.
Meanwhile, crude oil prices were lower in Asian trade today as unexpected gains in US crude inventories placed a dampener on energy demand, analysts said. New York's main contract, light sweet crude for March delivery, fell three cents to $89.56 per barrel.