Appreciation of the dollar in the overseas market also contributed to the rupee’s weakness.
The rupee depreciated 7 paise to 66.26 against the dollar in early trade today on foreign fund outflows amid appreciation in the US currency overseas.
Dealers attributed the rupee’s fall to fresh demand for the US currency from importers and banks.
However, early gains in domestic stock markets capped the rupee losses, they said.
The rupee had gained 3 paise to close at 66.19 per dollar Wednesday on fag-end selling of dollars by banks and exporters.
The benchmark BSE Sensex recovered by 215.57 points, or 0.84% to 25,669.13 in early trade today.