The rupee weakened further to trade 31 paise lower at 67.74 against the greenback in late morning deals following sustained bouts of month-end dollar demand from importers and banks.
The domestic unit resumed lower at 67.62 as against yesterday's closing level of 67.43 per dollar at the inter-bank foreign exchange here.
It slid further to 67.75 before quoting at 67.74 at 1030 hrs, hovering between 67.50 and 67.75 during morning deals.
"Continued foreign capital outflows and month-end dollar demand weighed on rupee sentiment," a dealer said.
Yesterday, the rupee had surged by 35 paise to end at a new two-week high of 67.43 against the US dollar after a surprise crash in crude prices quickly faded near-term trade deficit and inflation worries.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 795.06 crore yesterday, provisional data showed.
Meanwhile, the 30-share BSE Sensex trading up by 24.75 points, or 0.07 per cent, at 35,190.23 at 1055 hrs.