A lower opening in the domestic equity market too weighed on the investor sentiment.
The renewed strength of the dollar overseas weighed on the rupee.
Mumbai: The rupee depreciated 21 paise to 66.59 against the US dollar on Wednesday at the interbank foreign exchange due to appreciation of the greenback amid rising US bond yields and surge in global crude oil prices.
Also, a lower opening in the domestic equity market too weighed on the investor sentiment.
Dealers also attributed the rupee's fall to increased demand for the US currency from importers due to month-end demand and sustained foreign capital outflows.
The rupee on Tuesday recovered by 10 paise to 66.38 against the US dollar due to fresh selling of the American currency by exporters and banks.
Meanwhile, the benchmark Sensex fell 79.94 points, or 0.23 per cent, to 34,536.70 in early trade.
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