The rupee trimmed its early losses, but was still quoted lower by 8 paise to 59.65 per dollar on demand of the US currency from banks and importers triggered by its higher value overseas.
Persistent capital outflows from foreign funds also affected the rupee value against the dollar, a forex dealer said.
The rupee resumed lower at 59.74 per dollar as against the last closing level of 59.57 at the Interbank Foreign Exchange (Forex) Market.
It dropped further to a low of 59.75 before quoting 59.65 per dollar at 1040 hours.
It moved in a range of 59.63 and 59.75 per dollar during the late morning deals.
In New York, the US dollar trimmed its earlier surge but remained higher versus most major currencies yesterday, building on gains triggered a day earlier after Federal Reserve Chairman Ben Bernanke said the bank could begin to slow its stimulus-providing programme of bond purchases by the end of the year.
Meanwhile, the Indian benchmark BSE-30 share index, Sensex, recovered from initial losses and was quoting higher by 13.61 points, or 0.07 per cent, to 18,732.90 at 1040 hours.
