The rupee depreciated by 15 paise to 73.22 against the US dollar in opening trade on Monday on the back of muted opening in domestic equities and strengthening of the US currency.
Traders said the rupee opened on a weak note against the greenback amid the dollar index reaching a near one-month high on risk aversion.
At the interbank forex market, the domestic currency opened at 73.21 against the US dollar, then fell further to 73.22 — registering a fall of 15 paise over its previous close.
On Friday, the rupee had settled at 73.07 against the American currency.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.09 per cent to 90.85.
“The US dollar Index is trading flat this morning in Asian trade against major peers. Downside was capped as softening US economic data and rising coronavirus cases turned investors cautious,” Reliance Securities said in a research note.
Foreign fund flows into the domestic equity markets could lift sentiments. However, most of the Asian currencies are trading weak against the US dollar and could weigh on sentiments, the research reported noted.
The euro and the sterling were flat against the US dollar, the Japanese yen was flat to marginally higher against the US dollar this morning.
A widening trade deficit along with chances of a populist budget could dent the rupee’s prospects during the week.
However, strong interest of foreign institutional investors (FIIs) in the domestic equity market will stop any sharp depreciation moves.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 270.91 points lower at 48,763.76, and the broader NSE Nifty declined 107.35 points to 14,326.35.
FIIs were net buyers in the capital market as they purchased shares worth Rs 971.06 crore on a net basis on Friday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.94 per cent to $ 54.58 per barrel.