The rupee weakened to a fresh 13-month low by falling 27 paise to 66.65 against the American currency on bouts of month-end dollar demand from importers amid crude price volatility and rising US bond yields.
The rupee opened lower at 66.48 from yesterday's closing level at 66.38 per dollar at the interbank foreign exchange here.
The domestic unit dropped further to 66.74 before paring some losses to quote at 66.65 at 1030 hrs.
The rupee hovered between 66.47 and 66.74 during morning deals.
Continued FII-selling of local equity and debt, and weak stock market also weighed on the rupee.
Rising crude is putting pressure on rupee already stressed by widening fiscal deficit, a dealer said.
Meanwhile, the US dollar inched higher against its major peers in early Asian trade, approaching its recent four-month high as the US 10-year bond yield poked above 3 per cent to hit its highest level since early 2014.
The 30-share BSE Sensex was trading lower by 71.46 points, or 0.21 per cent, at 34,545.18 at 1100 hrs.