A sharp spike in consumer price inflation in November and a worse-than-expected contraction in industrial production in October also affected the rupee sentiment, a dealer said.
The rupee opened lower at 62.10 per dollar as against the previous closing level of 61.83 at the Interbank Foreign Exchange (Forex) Market.
It dropped further to 62.18 before quoting at 62.16 per dollar at 1045 hours.
In New York market, the dollar rose yesterday after US retail sales gained momentum in November, adding to speculation about when the Federal Reserve could begin slowing its monthly bond purchases.
Meanwhile, the Indian benchmark BSE-30 share barometer Sensex dropped by 138.94 points or 0.66 per cent to 20,786.67 at 1045 hours.