Indian rupee ended lower by 52 paise at 74.87 per dollar, amid Indian benchmark indices shed over 1.5 percent on concern over rising Covid cases nationwide.
It opened 43 paise lower at 74.78 per dollar against previous close of 74.35 and traded in the range of 74.77-75.04.
The Sensex was down 882.61 points or 1.81% at 47949.42, and the Nifty was down 258.40 points or 1.77% at 14359.50.
"Last week, there has been a lot of chaos in the forex market. Traders were waiting for RBI to set the upper limit, which is 75.30-75.35, from where the USDINR spot reversed its uptrend,"Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services.
"Due to the rising coronavirus cases in India the outlook for rupee still looks to be gloomy. But the weakness in dollar and Fed’s willingness to tolerate more inflation will keep the USDINR spot lower and we expect it to trade in between 74-75.50 this week."
"Meanwhile, gold witnessed some profit booking due to appreciation in the rupee. Until the MCX GOLD price trades above 45000, the uptrend will continue towards 47500 and then at 48850," Gupta added.
Oil prices fell on Monday amid mounting concerns that surging caseloads of coronavirus infections in India and other countries will lead to stronger measures and hit economic activity, along with demand for commodities such as crude.
Due to weakness in the Dollar index, the rupee started strengthening once again from the hurdle of 75.5. However, fears that a surge in domestic Covid-19 cases and lockdown in some states could hamper economic recovery could dent the money market, said ICICI Direct.
The dollar-rupee April contract on the NSE was at Rs 74.55 in the last session. The open interest increased 6% for the April series, it added.
Gold edged higher on Monday, hovering near a seven-week peak hit in the previous session, as a weaker dollar and lower U.S. Treasury yields supported prices.