The rupee fell by 29 paise to 62.22 against the dollar in early trade today at the Interbank Foreign Exchange market as the US currency gained strength.
Forex dealers said besides dollar's gains against other currencies on hopes of a possible breakthrough in the US budget crisis, fresh demand from importers for the American currency also put pressure on the local currency.
They said a lower opening in domestic equity market too weighed on the rupee.
The local currency had depreciated by 14 paise to close at 61.93 against the US currency in the previous session, partially erasing early losses after government data showed India's trade deficit narrowed to a 30-month low.
Meanwhile, the BSE benchmark Sensex fell by 36 points, or 0.17%, to 20,213.26 in early trade today.