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The rupee pared its initial gains and settled for the day 5 paise lower at 83.50 (provisional) against the U.S. dollar on Monday, weighed down by elevated crude oil prices.

Forex traders said a weak trend in domestic equities also dented investor sentiments.

At the interbank foreign exchange, the local unit opened at 83.43, then touched an intra-day high of 83.42 and a low of 83.50 against the greenback. The rupee finally settled at 83.50 (provisional) against dollar, registering a fall of 5 paise over its previous close.

On Friday, the rupee inched up 1 paisa to settle at 83.45 against the U.S. dollar.

Forex traders said U.S. dollar demand from importers and a recovery in crude oil prices weighed on the rupee.

“We expect the rupee to trade with a slight positive bias on the rise in risk appetite in global markets. However, any recovery in crude oil prices may cap sharp upside. Any renewed geopolitical tensions in the Middle East may also weigh on rupee at higher levels,” said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.

USD-INR spot price is expected to trade in a range of ₹83.20 to ₹83.70, Mr. Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.06% higher at 105.09.

Brent crude futures, the global oil benchmark, advanced 0.80% to $83.62 per barrel.

On the domestic equity market front, Sensex advanced 17.39 points, or 0.02%, to settle at 73,895.54 points. The Nifty fell 33.15 points, or 0.15%, to close at 22,442.70 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth ₹2,391.98 crore, according to exchange data.

Meanwhile, India’s forex reserves dropped $2.412 billion to $637.922 billion as on April 26, in the third consecutive weekly decline in the reserves, the Reserve Bank of India (RBI) said on Friday.

In the previous reporting week, the overall reserves had declined $2.28 billion to $640.33 billion.

On the macroeconomic front, the seasonally adjusted HSBC India Services Business Activity Index fell from 61.2 in March to 60.8 in April, highlighting one of the strongest growth rates seen in just under 14 years.

The rupee depreciated 15 paise to close at 83.21 (provisional) against the U.S. dollar on Tuesday (October 3), as a strong U.S. dollar and weak domestic equities dented investor sentiments.

Forex traders said muted domestic macroeconomic data and sustained FII outflows also mounted downside pressure on rupee.

At the interbank foreign exchange market, the local unit opened at 83.21 against the U.S. dollar and moved in a range of 83.23 to 83.17.

The rupee finally settled at 83.21 (provisional) against the U.S. dollar, down 15 paise from its previous close.

On Friday, the rupee appreciated 13 paise to settle at 83.06 against the U.S. dollar.

On Monday, the domestic forex market was closed on account of Mahatma Gandhi Jayanti.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.14% to 104.05.

Brent crude futures, the global oil benchmark, declined 0.02% to #90.69 per barrel.

“We expect the rupee to trade with a negative bias as the hawkish Fed speak and a strong dollar may continue to put downward pressure on the rupee. Risk aversion in global markets may further weigh on the domestic currency,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Mr. Choudhary further said that decline in crude oil prices and any selling of dollars by RBI may support rupee at lower levels.

“Traders may take cues from JOLTS job openings data from the U.S. Investors may remain cautious ahead of the RBI’s monetary policy meeting later this week. USD-INR spot price is expected to trade in a range of ₹82.80 to ₹83.70,” Mr. Choudhary said.

On the domestic equity market front, the 30-share BSE Sensex closed 316.31 points or 0.48% lower at 65,512.10. The broader NSE Nifty declined 109.55 points or 0.56% to 19,528.75.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Friday as they offloaded shares worth ₹1,685.70 crore, according to exchange data.

Manufacturing activities in India fell to a five-month low in September as new orders rose at a softer pace, which tempered production growth, a monthly survey said on Tuesday.

The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell to 57.5 in September, down from 58.6 in August — the lowest in five months.