The rupee opened on a flat note and depreciated 7 paise to 73.42 against the US dollar in opening trade on Monday on fresh demand for the US currency from crude and gold importers.
However, capital inflows and strong domestic equities limited the local currency’s fall to some extent.
The local unit opened at 73.38 against the US dollar at the interbank forex market, then lost ground and touched 73.42, down 7 paise over its previous close.
On Friday, the domestic unit settled at 73.35 against the greenback.
“Rising COVID-19 cases has prompted investors to move towards the safe haven appeal of the US dollar,” Reliance Securities said in a research note.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.09 per cent to 93.76.
India’s COVID-19 caseload rose to 75,50,273, while death toll touched 1,14,610. Globally, the number of cases has topped 3.98 crore and death toll has crossed 11.12 lakh mark.
“Most of the Asian currencies have started marginally stronger against the US dollar this Monday morning and could lift sentiments,” the report noted.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 483.72 points higher at 40,466.70 and the broader NSE Nifty rose 113.25 points to 11,875.70.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 479.59 crore on a net basis on Friday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.30 per cent to USD 42.80 per barrel.