The rupee weakened by 29 paise to 68.13 against the dollar in early trade today as demand for the American unit from importers and banks picked up.
The domestic equity markets opening lower also put pressure on the rupee but the dollar falling to a two-week-low against the yen on global trade concerns capped the losses, dealers said.
On Friday, the rupee had continued its rally for the third straight session, strengthening 14 paise to end at 67.84 against the dollar amid sustained unwinding of American currency by exporters.
The benchmark Sensex fell by 56.31 points, or 0.16 per cent, to 35,633.29 in early trade today.
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