The domestic unit gave up its overnight gains and resumed sharply lower at 66.72 per dollar as against yesterday's level of 66.41 at the Interbank Foreign Exchange (Forex) market.
It hovered in a range of 66.60 to 66.76 during the morning deals before quoting 66.61 at 1030 hrs.
The dollar index is currently up 0.02 per cent at 95.96 against a basket of six currencies.
Crude oil prices fell in early Asian trade as weak Japanese and Chinese economic data fuelled concerns that low levels of investment could further erode already slow growth in Asia.
Meanwhile, the benchmark BSE Sensex was trading down by 326 points or 1.27 per cent at 25,393.53 at 1035-hrs.