NEW DELHI: The rupee dropped 74 paise to 66.50 against the US dollar in early trade on Monday amid a sharp surge in dollar globally on data showing a stronger-than-expected rise in US non-farm payrolls in October.The domestic currency had closed at 65.75 to a dollar on Friday amid dollar buying by banks and importers.The US economy added 271,000 jobs in October against 180,000 projected by economists in a Reuters’ poll.A surge in US hiring made a stronger case for the US Federal Reserve to raise interest rates next month after seven-eight years.Higher interest rate in the US can lead investors to pull out money from markets like India and invest in assets there. This may weaken dollar-rupee exchange rate.Meanwhile, NDA's big defeat in the hands of Nitish Kumar-led JD (U) in Bihar assembly elections too weighed on sentiment.The Nitish Kumar-led Mahagatbandhan or Grand Alliance won 178 seats in the Bihar election, while the NDA finished with just 58 seats in the 243-member House. A decisive victory for the rivals is likely to increase uncertainty over the NDA government's reforms process.BJP's rout in Bihar could drive the rupee lower on Monday as foreign investors, fearing the Modi government to go slow on reforms after the election results, may resort to panic selling, ET reported.The local unit, which dropped about 0.75 per cent to the US dollar in the past one week amid global and domestic concerns, may lose another 2-3 per cent in next few weeks, dealers told ET. They expect rupee to slide to as low as 67-67.50 in the next few weeks.“With the Bihar poll outcome, expectations for an acceleration in the pace of reforms would reduce among investors,” said Brijen Puri, managing director at JP Morgan India. “This, in turn, would raise doubts on the country's long-term growth prospects,” he said. “With improving non-farm payroll numbers it is a double whammy for Indian risk markets.”However, Puri said he expects fiscal consolidation to continue.