The rupee was trading lower by 10 paise at 66.83 against the dollar in early trade on sustained foreign fund outflows amid increased demand for the US currency from importers.
Moreover, lower opening in domestic equities also weighed on the domestic currency, dealers said.
The dollar was weak against major global currencies, capping the rupee losses, they added.
The rupee had lost 4 paise to close at 66.73 per dollar in Monday’s trade on firm demand for the American unit from importers.
Meanwhile, the benchmark BSE Sensex was trading lower by 98.89 points or 0.38% to 25,431.22 in early deals.