The rupee snapped its six-session winning streak Monday faling by 16 paise against the US currency due to fresh dollar demand from importers despite
bullish equities and increased capital inflows.
At the Interbank Foreign Exchange (Forex) market, the domestic unit settled at 44.83/84, a loss of 16 paise over the previous close.
"The rupee traded weaker throughout the day due to sluggish euro and huge dollar demand by oil marketing companies in India, as prices
of crude rose considerably over the last few days," Alpari Forex (India) CEO Pramit Brahmbhatt said.
However, the positives in the stock market and good capital inflows restricted a further decline of rupee, he said.
"The trading range for the USD/INR will be between 44.55-45.05 tomorrow (Tuesday)," he added.
The domestic currency opened lower at 44.72/74 a dollar from its last weekend's close of 44.67/68 and remained in negative terrain
throughout the day to touch a low of 44.90
before settling at 44.83/84.
In the last six straight trading sessions, it had gained by 55 paise or 1.22 per cent.
Renewed dollar demand from importers, mainly oil refiners to meet their month-end requirements, pushed the rupee downwards as well as short-coverings of dollars from some banks after decent fall, too, weighed on the rupee.
The US dollar extended its gains versus major currencies last Friday in New York after a Federal Reserve official said the Central Bank should aggressively tighten monetary policy within a year.
However, the dollar index traded lower by 0.03 per cent, against a basket of currencies in European market Monday.
The Indian benchmark Sensex Monday rallied by another 127.50 points, or 0.68 per cent, to close at 18943 and Foreign Institutional Investors (FIIs) pumped in USD 559.21 million in the previous week.
Meanwhile, crude oil rose to USD 105.55 per barrel in Asian trade Monday as the unrest in Libya and the Middle East showed no signs of
an end.
The rupee premium for the forward dollar closed steady-to-slightly-better on stray paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in August finished stable at 138-140 paise.
Far-forward contracts maturing in February, however, edged up to 280-282 paise from 279-281 paise previously.
The Reserve Bank of India has fixed the reference rate for the dollar at Rs 44.78 and the euro at Rs 62.96.
The rupee continued to rule firm to end at Rs 71.64/66 against the pound sterling from last weekend's close of Rs 71.87/89 and also strengthened against the yen to Rs 54.90/92 per 100 yen from Rs 55.00/02 in the previous session.
It, however, recovered against the euro to Rs 62.94/96 from its last close of Rs 63.30/32.