The rupee weakened 25 paise to 67.28 against the dollar in early trade following month-end demand for the American currency from importers and banks.
Forex dealers said the US dollar's gain against other currencies overseas also gave the rupee the sinking feeling.
However, a higher opening of the domestic equity market capped the losses.
The rupee had appreciated 14 paise against the American currency to end at a one-week high of 67.03 on Friday on the back of robust dollar inflows in equities.
Meanwhile, the benchmark BSE Sensex rose further by 116.82 points, or 0.43%, to 26,770.42 in early trade.
