The rupee fell sharply by 26 paise to 64.53 against the dollar at the interbank forex market in early trade today as the greenback strengthened overseas.
Forex dealers said the greenback rose against other currencies overseas as expectations of rate hike by the US Federal Reserve grew stronger.
The US Federal Reserve yesterday kept its policy rate unchanged but expressed confidence in the outlook for the real economy.
Yesterday, the rupee had logged its first gain in three sessions by rising 6 paise to 64.27 against the US currency owing to fresh dollar unwinding by exporters.
The benchmark Sensex recovered by 59.52 points, or 0.18 per cent, to 32,460.03 in the opening trade today.