The Indian rupee weakened against the U.S. dollar in the morning deals on Thursday, as worries over China lowering the yuan's reference rate further continued to linger.

The People's Bank of China lowered its daily reference rate 1.1 percent to 6.4010 yuan per dollar on Thursday, following reductions of 1.6 percent on Wednesday and 1.9 percent on Tuesday.

The regional bond yields fell after the nation's consumer inflation eased more than estimated in July, raising the possibility of more policy easing.

Against the greenback, the rupee fell to a 2-year low of 64.9900 from an early high of 64.5500. At yesterday's close, the rupee was trading at 64.8500 against the greenback.

If the rupee extends its downtrend, it is likely to find support around the 69.00 area.

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