Analysts said that rupee depreciated amid rising demand for the greenback vis-a-vis other currencies overseas, even as crude oil prices eased.

According to Rahul Gupta, Currency Research Head, Emkay Global Financial Services Limited, the political unrest in the US, Middle-East tensions and no update over US-China trade deal has been keeping rupee under pressure.

Mr Gupta further said that "the only trigger is RBI policy". The central bank is scheduled to announce its next bi-monthly monetary policy on October 4.

"We expect rupee to rest in a narrow range of 70.70-71.30 levels for the next few sessions," said Amit Pabari, Managing Director, CR Forex.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.35 per cent to 98.68 on Wednesday.

Safe-haven assets like US Treasury bonds and the yen rallied after top US Democrat Nancy Pelosi on Tuesday announced the opening of formal impeachment inquiry into President Donald Trump.

The yield on the government of India's 10-year benchmark bond rose to 6.76 per cent.

In domestic stock markets, the Sensex ended 504 points or 1.29 per cent lower at 38,593.52 and the NSE Nifty 50 index dropped 148 points or 1.28 per cent to close at 11,440.20.

Brent futures, the global oil benchmark, dropped 2.14 per cent to $61.75 per barrel.