The rupee depreciated by five paise to 63.71 against the dollar in early trade today due to rise in greenback against other currencies overseas.
The increased demand for the US currency from importers also impacted the rupee sentiment, dealers said.
The dollar gained against other currencies overseas on expectations of increase in interest rates by the US Federal Reserve in coming months.
The rupee had lost 19 paise to close at three-week low of 63.66 against the US dollar yesterday on fresh demand for American currency from banks and importers on the back of a higher greenback in overseas markets.
Meanwhile, the benchmark BSE Sensex was trading up by 46.71 points, or 0.16 per cent, at 28,466.83 in early trade today.