The rupee resumed lower at 61.65 per dollar as against the last closing level of 61.54 at the Interbank Foreign Exchange market and dropped further to 61.71.
However, it trimmed its losses and was quoted at 61.58 per dollar at 1045 hours.
It hovered in a range of 61.56-61.71 per dollar during the morning deals.
In New York market, the dollar strengthened across the board yesterday after US data underscored a recovery in the manufacturing sector, and another Federal Reserve official emphasised the central bank was committed to withdrawing monetary stimulus.
Meanwhile, the BSE Sensex declined by 21.86 points, or 0.10 per cent, to 21,267.63 at 1045 hours.