The rupee fell by 7 paise to 68.20 against the US dollar in early trade today on month-end dollar demand from importers and banks.
Dealers said early losses in domestic equity markets also weighed on the rupee.
Yesterday, the rupee took a severe beating and ended sharply lower by 29 paise at 68.13 against the US currency.
The dollar weakened against other currencies overseas as worries about an intensifying trade fight between the US and its trade partners continued to hurt risk appetite.
The benchmark BSE Sensex fell 132.26 points, or 0.37 per cent, to 35,338.09 in early trade today.
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