The rupee weakened by 15 paise to close at 73.83 (provisional) against the US dollar on Monday as a stronger greenback against key rivals and rising crude oil prices weighed on investor sentiment.
Besides, multiple bouts of volatility on domestic equities front and mixed cues from global financial markets brought the rupee more under pressure, analysts observed.
At the interbank foreign exchange market, the rupee opened on a weak note at 73.70 and slid to the day's lowest level at 73.84 a dollar towards the fag-end of the session. For a brief period, it ventured into positive territory and touched a high of 73.60.
The domestic unit finally settled the day at 73.83 a dollar, showing a drop of 15 paise over its previous close. On Friday, the currency had closed 4 paise down at 73.68 against the US dollar.
The dollar index, which gauges the greenback''s strength against a basket of six currencies, rose by 0.11 per cent to 93.42.
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.
"The spot rupee closed 14 paise higher at 73.84 against the dollar due to rise in US treasury bond yields and oil prices. Oil prices are trading at the highest level since October 2018, with Brent crude oil near 80 dollars a barrel. At the same time, US bond yields are trading near June 2021 highs. A hawkish Fed and inflationary risk is pushing bond yields higher. This combination is positive for USDINR. However, dollar inflows remain robust and that is the reason why USDINR remains ranged between 73.60 and 74.00 levels. A clear break above 74.00 is needed for the $ bulls to take prices towards 74.60 levels."
On the domestic equity market front, the BSE Sensex ended marginally higher by 29.41 points or 0.05 per cent higher at 60,077.88. Similarly, the NSE Nifty closed the day 1.90 points or 0.01 per cent higher at 17,855.10.
Meanwhile, global crude oil benchmark Brent futures advanced 1.29 per cent to USD 78.23 per barrel.
Foreign institutional investors were net buyers in the capital market on Friday as they purchased shares worth Rs 442.49 crore, as per exchange data.
(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)