Besides increased dollar demand from importers, a lower opening in the domestic equity market put pressure on the rupee, forex dealers said.
Meanwhile, the BSE benchmark Sensex fell by 88.71 points, or 0.49 per cent, to 17,761.51.
They, however, added that euro's rise against the dollar in the overseas markets capped rupee's losses.
The rupee had gained 23 paise to end at nearly two-week high of 55.26 against the dollar on sustained selling of the American currency by exporters in yesterday's session.
In the last four sessions, the rupee has gained 49 paise, or 0.88 per cent.
